Canada's First Quantum cuts ore processing at Panama mine as protests block port
(Corrects paragraph 6 to say First Quantum (NASDAQ:QMCO)'s Cobre Panama mine contributes 5% to Panama's GDP)
(Reuters) -First Quantum Minerals has reduced ore processing at its sprawling copper mine in Panama as weeks-long protests against the project is blocking access to the port, the Canadian miner said on Monday.
The new contract for the Cobre Panama mine, which contributes 1% to global copper production, was approved on Oct. 20. However, the agreement has faced numerous legal challenges due to protests that claim it favors the miner too much and allege corrupt practices in its approval.
The company has denied all allegations but the uncertainty has triggered a 45% drop in its shares since the new contract, through Friday's close. They fell another 4.3% on Monday.
First Quantum said it had ramped down operations at one ore processing train as the blockade at the mine's Punta Rincon port has affected the delivery of supplies for its on-site power plant and is impacting the loading of copper concentrates.
The reduction of ore processing could impact about 2% of Panama's national workforce, the company said, adding two ore processing trains remain operational.
A Reuters survey earlier in November found that a majority of lawyers believe that Panama's top court would revoke First Quantum's contract for the mine, which contributes 5% to Panama's gross domestic product.
The mine would need to reduce the purchase of supplies and services that are equivalent to $20 million in weekly revenues to more than 2,000 Panamanian companies if the stoppages continue, the company added.
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