First Quantum Minerals Ltd. warned it will be forced to shut its Panama copper mine later this week if a port blockade continues to prevent the delivery of key supplies.
The Canadian company started slowing operations last week after what it called an illegal blockade of small boats at its port hit the delivery of supplies to the mine. It has since further reduced production and expects to put the site in care and maintenance mode from Nov. 23 if the situation doesn’t change, according to a person familiar with the matter, who asked not to be identified discussing private information.
Shares of First Quantum fell 1.4% by 12:58 p.m. in Toronto.
First Quantum has found itself at the center of a political storm in Panama, with the future of its massive copper mine called into question after widespread protests erupted last month over a deal to renew the company’s operating contract. President Laurentino Cortizo announced a referendum on the mine, although the vote has been shelved as the government waits for a Supreme Court ruling over whether to revoke the mine’s contract.
Hollywood actor Leonardo DiCaprio also weighed in this weekend, reposting a video calling for the “mega mine” to be shut down on his Instagram account.
First Quantum said Monday that it has halted a second ore-processing train, a week after stopping the first. The company said mining would have to stop altogether as supplies for its power station are set to run out this week.
“First Quantum wishes to reiterate its willingness to open new forums of dialogue to address the concerns of diverse sectors of society,” the company said Monday.
The reduction also led Franco-Nevada Corp., which owns a royalty on the copper produced from the mine, to scale back its production guidance for the year.
The Cobre Panama project is one of the world’s biggest and newest copper mines. The latest uncertainty over the mine comes as the future supply of copper has become a growing focus for global policymakers and business executives. While long-term supply of the metal is constrained, demand is forecast to surge as the global economy decarbonizes.
(Adds details on mine stoppage from second paragraph)
