First Quantum, government reach deal on Cobre Panama

First Quantum Minerals’ (TSX: FM) shares rose Wednesday after the company said its local unit Minera Panama inked a draft concession contract with the Panamanian government for the Cobre Panama mine.

The proposed agreement, which follows months of difficult negotiations, meets the goals the government outlined in January 2022 regarding government revenues, environmental protections, labour standards and legal protections for both sides, First Quantum said in a news release.

The proposed contract will have an initial 20-year term, with a 20-year extension option and additional extensions for the life of the giant copper mine. However, the document is still subject to a 30-day public consultation process and approvals by Panamanian government bodies.

The Panama Maritime Authority has also confirmed Minera Panama can resume copper concentrate loading at the Punta Rincon port, which had been suspended since early February. Ore processing is also expected to resume, bringing the mine back to full production levels over the coming days. Operations at the mine, located 120 km west of Panama City and 20 km from the Atlantic coast were halted by the government in December amid an impasse in negotiations.  

First Quantum had estimated the suspensions caused up to US$8 million in losses per day.