Canadian mining firm at centre of lethal Panama protests has no plans to cut back

The Canadian mining firm that controls a large copper mine in Panama says it has no plans to change its operations regardless of widespread native protests in opposition to the agency’s mining contract which have escalated and turned lethal.

Final month, Vancouver-based First Quantum Minerals Ltd. was awarded a contract to proceed operations at a large open-pit copper mine in Panama. The phrases of that deal, which give the corporate the best to mine the positioning for at the least the following twenty years in trade for $375 million US a 12 months to the federal government, have turn into a flashpoint for native teams, a few of whom oppose the mine plan for monetary and environmental causes.

That opposition has escalated into broader anti-government protests that officers say are costing Panama $80 million US a day.

The mine faces authorized and constitutional challenges from the nation’s high court docket, and residents might get an opportunity to vote on the contract extension in a referendum subsequent month. However final week, First Quantum mentioned it was “assured with respect to its authorized place” and reiterated the financial advantages of the mine. 

In addition to the Panama Canal, the sprawling Cobre Panama copper mine is the second-largest contributor to the nation’s economic system, answerable for about 5 per cent of GDP. One out of each 50 individuals in Panama are immediately or not directly employed by the mine, First Quantum says. 

Graffiti that reads ‘No Mining’ is proven on a billboard that was smashed throughout a protest in opposition to the awarding of a profitable mining contract to Vancouver-based First Quantum Minerals. (Walter Hurtado/Bloomberg)

Regardless of that, opposition to the mining contract has prompted widespread protests throughout the nation, which is grappling with excessive inflation and unemployment. The protests “have been initially organized by environmental teams opposing mining exercise,” mentioned Nestor Rodriguez, a mining analyst with Barclays funding financial institution. “However different teams like labour unions … lecturers, Indigenous teams, college students and the civil sector joined them as days handed.”

Colleges throughout the nation have been closed for greater than every week, and protesters have taken to the streets, disrupting roads, ports and different main infrastructure.

“Manufacturing on the Cobre Panama mine stays uninterrupted right now, nevertheless, like many companies throughout Panama, protests, together with blockades of key roads, have induced disruptions on website in addition to shortages in sure provides,” the corporate mentioned final week.

These protests took a lethal flip this week when two protesters taking part in a blockade of a serious freeway have been shot lifeless.

Photographs and movies of the surprising incident are circulating on-line, and the nation’s legislation enforcement company said on X that a man has been arrested and charged in relation to the crimes.

That lethal escalation has to this point not modified the mine’s standing.

A view of the Cobre Panama copper mine.
The huge copper mine makes up about 5 per cent of Panama’s whole GDP. (Aris Martínez/Reuters)

“Nothing further so as to add right now,” a spokesperson for First Quantum informed CBC Information in a press release, when requested if it was rethinking its plans following the shootings. “The violence which you discuss with … was not close to nor linked to the Cobre Panama mine,” the corporate mentioned, noting that it was on a freeway in a very completely different a part of the nation.

The corporate could also be continuing with enterprise as regular, assuming the contract to mine the positioning will prevail, however traders are unconvinced that issues are going to play out as deliberate.

First Quantum shares have misplaced greater than 40 per cent of their worth on the TSX for the reason that saga started.

Of the 20 analysts who cowl the inventory, 15 have a “maintain” ranking on the shares, which is a suggestion neither to purchase it nor to promote it. And the primary motive why is the uncertainty.

“There nonetheless stays a excessive diploma of uncertainty in regards to the future … and whether or not or not the phrases of the contract will likely be renegotiated,” TD Financial institution analyst Greg Barnes mentioned in a notice to shoppers.

CIBC analyst Bryce Adams mentioned the “scenario stays very fluid and unpredictable.” He expects shares to stay underneath stress for some time as a result of the dispute “might prolong by to nationwide elections scheduled for Might 2024.”

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