First Quantum Minerals Ltd. (FQM) reported that its subsidiary, Minera Panama S.A. (MPSA), has reduced its processing operations at its Cobre Panama mine by ramping down one ore processing train while two remain operational. This disruption to operations is due to an illegal blockade of small boats at the mine’s Punta Rincón port.
This situation arose after FQM had finally reached an agreement on royalties with the Panamanian government that allowed the Cobre Panama mine to resume full capacity after nine months of negotiations.
The company said the illegal actions at the port have affected the delivery of supplies for the mine’s on-site power generation plant, which is necessary for full operations and for safe environmental stewardship, including operation and maintenance of the tailings management facility. In addition, the illegal actions have hindered the loading of copper concentrate onto vessels.
FQM and MPSA said they respect the right to protest in a safe and lawful manner, however, the illegal actions at the port are impacting operations at Cobre Panama just as the illegal blockades by protestors in other parts of the country over the last three weeks have been impacting the daily lives of Panamanians and the Panamanian economy. The Chamber of Commerce, Industries and Agriculture of Panama estimates the cost of the protests and road blockades across the country at between $60 and $90 million per day. In response to the ongoing protests and the economic impacts, S&P, Moody’s and Fitch have all taken negative credit actions for Panama in recent weeks.
