First Quantum suspends loading operation in Panama

First Quantum Minerals Ltd. [FM-TSX] on Monday released an update on the status of its Cobre Panama copper mine in Panama.

The company said it has received a resolution, issued by the Panama Mining Authority (AMP) requiring the suspension of concentrate loading operations at the Cobre Panama port, Punta Rincon, until evidence is provided that the process of certification of the calibration of the scales by an accredited company has been initiated.

“The resolution is part of a series of escalating attempts by the Government to pressure the company into accepting a refreshed concession contract on the Government’s terms,’’ First Quantum said in a press release.

Cobre Panama is a huge open-pit copper project located in the Panama jungle, about 120 kilometres west of Panama City and ranks as First Quantum’s key asset. Franco Nevada Mining Corp. [FNV-TSX, NYSE] is a partner in the operation.

Monday’s announcement is the latest development in a dispute between the company and the Government of Panama over the huge mining Cobre Panama operation which is operated by First Quantum subsidiary Minera Panama S.A. (MPSA). The two sides have been discussing a deal that would increase annual tax payments to the country to at least US$375 million.

“It will be to the detriment of Panama, the mine’s employees, suppliers and the broader Panamanian economy if the Government of Panama forces MPSA to shut Cobre Panama, which may become necessary if concentrate is not shipped by mid-February due to limited storage capacity on site,’’ First Quantum said.

First Quantum said MPSA submitted the required proof of the initiation of the certification process by an accredited company on February 3, 2023. It said the resolution deviates from the prior process of internationally accepted certifications that MPSA has previously provided to AMP, which have been accepted until now.

“As a result, MPSA has suspended loading operations while it awaits a response from AMP,’’ First Quantum said.

On February 3, 2023, First Quantum shares closed at $27.90. The shares are currently trading in a 52-week range of $45.38 and $18.67.

First Quantum is a diversified mining company that is engaged in the production of copper, nickel, gold and zinc. It has operating mines in Zambia, Finland, Turkey, Spain and Mauritania. The company’s portfolio of assets includes the Kansanshi mine in Zambia, which ranks as the largest copper mine in Africa.

The company’s chief operation is Cobre Panama, the world’s largest new copper mine.

First Quantum recently increased its stake in the open pit project to 90%. Having reached the commercial production stage in early September, 2019, Cobre Panama is expected to produce more than 300,000 tonnes of copper annually, along with gold, silver and molybdenum.