01:14:01 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



First Quantum Minerals Ltd
Symbol FM
Shares Issued 692,505,043
Close 2023-02-03 C$ 27.90
Market Cap C$ 19,320,890,700
Recent Sedar Documents

First Quantum suspends loading ops at Cobre Panama port

2023-02-06 10:43 ET - News Release

An anonymous director reports

FIRST QUANTUM MINERALS PROVIDES UPDATE ON STATUS OF COBRE PANAMA AND THE PUNTA RINCON PORT

On Jan. 26, 2023, First Quantum Minerals Ltd.'s Minera Panama SA (MPSA) received Resolution No. 007-2023. The resolution was issued by the Panama Maritime Authority (AMP) and requires the suspension of concentrate-loading operations at the Cobre Panama port, Punta Rincon, until evidence is provided that the process of certification of the calibration of the scales by an accredited company has been initiated.

MPSA submitted the required proof of the initiation of the certification process by an accredited company on Feb. 3, 2023. This resolution deviates from the prior process of internationally accepted certifications that MPSA has previously provided to AMP, which have been accepted until now. As a result, MPSA has suspended loading operations while it awaits a response from AMP.

It will be to the detriment of Panama, the mine's employees, suppliers and the broader Panamanian economy if the government of Panama forces MPSA to shut Cobre Panama, which may become necessary if concentrate is not shipped by mid-February due to limited storage capacity on site.

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.

Recent steps taken by the Panamanian authorities include the following actions, which prejudice good-faith negotiations and are both untimely and unnecessary, in particular given the recent progress that both parties have made toward resolving outstanding issues:

  • Taking steps to block copper exports -- The AMP has taken several actions to obstruct operations at MPSA's Punta Rincon shipping terminal. These include conducting extraordinary and unusual inspections, instructing maritime pilots not to provide service to vessels and issuing the resolution.
  • Attempting to place Cobre Panama on care and maintenance -- On Dec. 19, 2022, by way of executive Resolution No. 234, the government directed MPSA to submit a plan to place the mine under care and maintenance. First Quantum believes that the government's requirement is an unnecessary step that will have serious and negative consequences. MPSA has pursued a long series of appeals, which appeals remain pending with the Ministry of Commerce and Industries.
  • A change of the government's long-held position on the validity of the concession contract -- Following a 2018 Supreme Court ruling on the unconstitutionality of Law 9, which approved MPSA's concession contract, the government issued several public statements reaffirming that the concession contract remained valid in all aspects given the nature and effects of unconstitutionality rulings. Prior to the ruling, the Ministry of Commerce and Industries issued Resolution No. 128 of 2016, granting the first extension of the concession contract through to 2037. In connection with two proceedings filed by third parties seeking annulment of the extension resolution, the Procurador de la Administracion issued opinions in 2018 and 2019 stating that the resolution was legal. On Jan. 11, 2023, the administration's attorney abruptly switched course and filed motions in the two proceedings asking the Supreme Court to declare that the extension resolution be deemed without legal effect. The Supreme Court has not yet ruled on the matter.

First Quantum and MPSA are prepared to meet, and in part exceed, the objectives that the government outlined in January, 2022, related to revenues, environmental protections and labour standards. These include a minimum of $375-million per year in government income, comprising corporate taxes and a profit-based mineral royalty of 12 per cent to 16 per cent, with downside protections aligned with the government's position.

The company has also expressed its earnest desire to resolve all outstanding issues and continues to engage with the government, with a view to concluding a reasonable and durable arrangement regarding the long-term future of Cobre Panama. At the same time, First Quantum and MPSA are doing everything possible to support the work force, preserve the value and integrity of the mine, and defend First Quantum and its stakeholders, including through all available legal means.

We seek Safe Harbor.

© 2024 Canjex Publishing Ltd. All rights reserved.