Ottawa issues support pledge to First Quantum Minerals

The Canadian government will do its best to support First Quantum Minerals Ltd. (FM-TSX), Canadian Trade Minister Mary Ng has told reporters in Ottawa, without elaborating as the company deals with the fallout following the closure of its flagship copper mine in Panama.

“First Quantum Minerals is a really important Canadian company,’’ she said. “I’ve met with them. I continue to meet with them, I’m really looking forward to supporting the Canadian company….as best we can,’’ she said, without elaborating.

Ng’s comments mark the latest development after First Quantum was recently ordered by the Panamanian government to close its Cobre Panama copper-gold mine in the wake of country-wide protests.

First Quantum has said it remains committed to Panama even after Panama’s top court ruled that the operating contract for the company’s flagship Cobre Panama copper-gold mine is unconstitutional. Cobre Panama ranks as one of the world’s largest and newest copper projects.

First Quantum shares eased 0.47% or $0.06 to $12.46 and trade in a 52-week range of $39.13 and $9.31.

First Quantum has filed two notices of arbitration over the closure of the mine, but said it prefers to engage more with Panamanians in a bid to stress the value of the mine to the wider public.

The court ruling, which followed protests against the contract has plunged the open pit mine into months of uncertainty and impacts First Quantum’s partner Franco Nevada Mining Corp. [FNV-TSX, NYSE], which recently revised its production targets following the curtailment of operations at Cobre Panama and the risk of further disruptions at the mine site.

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.

Cobre Panama is First Quantum’s flagship operation. It 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.

In Zambia, First Quantum wholly owns the Sentinel mine and 80% of the Kansanshi mine, with the balance owned by the Zambian government. Jiangxi, First Quantum’s top shareholder, could end up buying one of the two mines or a stake in one of them, sources have told Reuters news service.

Talk of a possible deal has emerged one year ahead of the $1.05 billion in First Quantum debt that comes up for maturity in early 2025. The two Zambian mines together generated $943 million in revenue in the quarter ended September, 2023, and $210 million in operating profit according to company filings.

It is worth noting that First Quantum and Jiangxi held similar talks over the Zambian mines in 2019. Those talks resulted in Jiangxi picking up a significant minority stake in the company instead of stakes in the two mines.