First Quantum Minerals Ltd. plans to begin talks with the newly elected president of Panama, hoping to resolve the conflict that has led to the closure of the Cobre Panamá mine . As a result, the company is seeking to reopen negotiations that had been stalled under the previous administration. The mine is worth an estimated $10 billion and was closed last year after several months of civil unrest.
Future of the Cobre Panamá mine at stake
First Quantum Minerals expressed its willingness to work together with the incoming government to find a solution that benefits Panama, according to statements issued last Monday. Mulino will officially assume his position on July 1 of this year.
The stoppage of the mine in December was a decision by the outgoing president, Laurentino Cortizo, who ordered the closure after a Supreme Court ruling that annulled the company’s operating contract. The cessation of activities at Cobre Panamá, which contributed 5% of the country’s Gross Domestic Product, caused a considerable loss, reducing First Quantum’s market value by more than half.
Despite Mulino’s electoral victory, which could be considered a point in favor for the mining company, Royal Bank of Canada analyst Sam Crittenden noted that uncertainty still persists about the future of the mining company. mine . Likewise, he indicated the need to improve the public image of mining and to negotiate effectively with the new government before any possible reopening.
Challenges and opportunities
For his part, Shane Nagle, an analyst at National Bank of Canada, argued that the election result would not necessarily accelerate discussions to reopen the mine, citing recent statements by Trade Minister Jorge Rivera, who expressed doubts about the capacity of the mine. company to operate during the closure.
The reopening of Cobre Panamá would not only mean the reactivation of a vital economic asset for Panama, but could also serve as a case study for the management of socio-environmental conflicts in the mining industry globally. The approach taken by the new government could set a precedent for how economic interests are balanced with environmental and social concerns in future mining projects.
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Source: bloomberglinea
Photo: Shutterstock
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