First Quantum Minerals said its subsidiary Minera Panamá, S.A. received Resolution No. 007-2023 on January 26, 2023. Issued by the Panamá Maritime Authority (AMP), the resolution suspends concentrate loading operations at the Cobre Panamá port, Punta Rincón, until evidence is provided that the process of certification of the calibration of the scales by an accredited company has been initiated.
Minera Panamá said it submitted the required proof of the initiation of the certification process by an accredited company on February 3, 2023. This resolution deviates from the prior process of internationally accepted certifications that Minera Panamá said it has previously provided to AMP, which have been accepted until now. As a result, Minera Panamá has suspended loading operations while it awaits a response from the AMP.
Minera Panamá operates the Cobre Panamá mine and said it will be forced to idle the mine during mid-February due to limited storage capacity on site if the situation is not resolved.
First Quantum said 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.
According to the company, the Panamanian authorities have taken several actions to obstruct operations at the shipping terminal by conducting extraordinary and unusual inspections and instructing maritime pilots not to provide service to vessels. They attempted to place Cobre Panamá mine on care and maintenance during December, and that move is currently being appealed. The company also said the government changed its long-held position on the validity of the concession contract.
First Quantum said it and Minera Panamá are prepared to meet, and in part exceed, the objectives that the government outlined in January 2022 related to revenues, environmental protections, and labor standards. This includes a minimum of $375 million per year in government income, comprised of corporate taxes and a profit-based mineral royalty of 12% to 16%, with downside protections aligned with the government’s position.
So far, the Panamanian government does not seem receptive.