Freeport requests environmental permission for $741m leaching project in Chile
A leaching project is being planned at the El Abra mine.
Arbitration proceedings between Canadian miner Franco-Nevada and Panama over the Cobre Panama copper mine entered a new phase this week with the formation of a tribunal to hear the case, according to legal disclosures filed by the parties.
Investors are awaiting Panama President Jose Raul Mulino’s decision over the future of the mine, which was shut down last year due to public unrest. Cobre Panama is the flagship mine of Canadian miner First Quantum Minerals, which is also seeking damages from Panama.
Franco-Nevada had a streaming agreement with First Quantum to buy gold and copper from Cobre Panama in return for financing mine operations.
Franco-Nevada is seeking $5 billion in damages from Panama under the Canada-Panama free-trade agreement.
In 2023, Franco-Nevada took a $1 billion charge due to the mine’s closure. First Quantum has sought damages of at least $20 billion and Orla Mining, which had its separate mining contract canceled last year, is claiming at least $400 million from Panama. The next stage is formal arbitration proceedings in which the parties present their arguments.
Cobre Panama has become a flashpoint in the mining industry as its closure has removed 1% of global copper supply. Mulino has said his government will decide the mine’s fate early next year, even as the arbitration cases proceed.
Rating agency Moody’s cut Panama’s outlook to negative in November and pointed out potential credit risks due to the ongoing litigation.
“Absent measures to address this risk, including reopening negotiations with the mine’s operators, the government’s credit profile could face a severe financial shock in case of an adverse ruling,” Moody’s said.
Franco-Nevada did not respond to a request for comment. First Quantum declined to comment.
Shares of Franco-Nevada were down 1.7% in Toronto and First Quantum dipped 0.5%.
(By Divya Rajagopal; Editing by Rod Nickel)
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