Miners will need to focus more on building trust with local communities to retain their licence to operate, analysts say
As First Quantum Minerals Ltd.’s lucrative copper mine faces a shutdown in Panama, some analysts warn that such events may occur more often as the energy transition away from fossil fuels focuses government and public attention on certain key metals.
Going forward, analysts say, miners will need to focus more on building trust with local communities to retain their licence to operate in their respective regions, especially in Latin America, which has abundant reserves of copper and lithium and whose leaders routinely gauge public opinion on mining-related issues.
“What we are seeing in Panama is not new,” Theo Yameogo, EY Americas and Canada mining and metals leader, said. “In today’s licensing operations, particularly in South America, leaders in those countries typically seek input from the public and elected officials … and the outcomes can vary. We should expect to see even more of this in the future.”
Vancouver-based First Quantum may lose its Cobre Panama mine after Panama’s top court on Nov. 28 said that a law linked to the company’s 20-year mining contract with the country was illegal.
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