First Quantum Minerals (TSX:FQM) announced its Minera Panama (MPSA) subsidiary has begun to reduce processing operations at its Cobre Panamá open-pit copper mine after an illegal blockade at the mine’s Punta Rincón port affected the delivery of supplies.
In a statement, First Quantum said the mine is ramping down one ore processing train while two remain operational due to the disruption to operations by the illegal blockade of small boats. The affected supplies are for the mine’s on-site power generation plant.
In addition, it said the illegal actions have hindered the loading of copper concentrate onto vessels.
“First Quantum and MPSA respect the right to protest in a safe and lawful manner, however, the illegal actions at the port are impacting operations at Cobre Panama just as the illegal blockades by protestors in other parts of the country over the last three weeks have been impacting the daily lives of Panamanians and the Panamanian economy,” the company said.
If normal port activities do not resume, First Quantum said the reduction of ore procession at Cobre Panama will directly impact over 7,000 employees and contractors. Also, the mine will need to significantly reduce supplies and services, impacting more than 2,000 Panamanian suppliers.
It noted that Cobre Panama contributes roughly 5% of Panama’s GDP and accounts for 75% of its export goods.
Meanwhile, Reuters reported that Panama's top court is likely to rule against First Quantum when it decides on the fate of its mining right for Cobre Panama in the coming weeks.
That’s according to a majority of lawyers canvassed in a Reuters survey, who cited precedent for a similar verdict.
The 20-year contract has faced numerous legal challenges due to protests that claim it favors the miner too much and allege corrupt practices in its approval, per the report.
First Quantum's shares were down 4% at C$15.63 by noon in Toronto.
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