Closure of Panama copper mine threatens e-transition – by Jack Mintz (Financial Post – February 2, 2024)

Forced shutdown of $10-billion mine signals to companies: invest in rule-of-law countries only

Canada’s First Quantum Minerals, sixth largest copper producer in the world, has learned the hard way: a US$10-billion mining project can be cancelled after several years in operation with the support of several successive governments.

In December, the Panamanian government ordered the closing of FQM’s Cobre Panamá mine, which produced 350,000 tonnes of copper in 2022. This represents 1.5 per cent of global copper supply and five per cent of Panama’s GDP, neither a trivial number.

The shutdown follows a Supreme Court decision in late November declaring that a new mining contract with FQM was unconstitutional despite its having undergone a process involving government and international legal experts.

The court’s verdict followed mass demonstrations by social and environmental groups after Congress’ October approval of the new contract, which would have yielded substantially more taxes for Panama and a minimum fiscal payment of $375 million by FQM, something not seen anywhere in the world.

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