First Quantum Provides Operational Update at Cobre Panama
TORONTO – First Quantum Minerals has announced that its subsidiary, Minera Panama S.A. (“MPSA”), has begun to reduce ore processing operations at the Cobre Panama mine.
Cobre Panama has reduced its processing operations by ramping down one ore processing train while two remain operational. This disruption to operations is due to an illegal blockade of small boats at the mine’s Punta Rincón port. The illegal actions at the port have affected the delivery of supplies for the mine’s on-site power generation plant, which is necessary for full operations and for safe environmental stewardship, including operation and maintenance of the tailings management facility. In addition, the illegal actions have hindered the loading of copper concentrate onto vessels.
First Quantum and MPSA respect the right to protest in a safe and lawful manner, however, the illegal actions at the port are impacting operations at Cobre Panama just as the illegal blockades by protestors in other parts of the country over the last three weeks have been impacting the daily lives of Panamanians and the Panamanian economy. The Chamber of Commerce, Industries and Agriculture of Panama estimates the cost of the protests and road blockades across the country at between $60 and $90 million per day. In response to the ongoing protests and the economic impacts, S&P, Moody’s and Fitch have all taken negative credit actions for Panama in recent weeks.
MPSA is taking a methodical and responsible approach to adapt its operations to these circumstances. The health, safety and well-being of the workforce, as well as the safe environmental management of the site and tailings storage facility, are central to MPSA’s approach.
If normal port activities do not resume, the reduction of ore processing at Cobre Panama will directly impact over 7,000 employees and contractors as well as an additional 40,000 people whose livelihood is directly associated in providing services to the mine. This is estimated to represent more than 2 percent of the Panamanian national workforce, who in turn support an estimated 100,000 Panamanians. In addition, the mine will need to significantly reduce the purchase of supplies and services that are equivalent to $20 million in weekly revenues to more than 2,000 Panamanian companies. Cobre Panama contributes approximately 5 percent of Panama’s GDP and makes up 75 percent of the country’s export of goods.
After ten years in Panama, First Quantum remains committed and open to constructive dialogue to address the concerns raised by the people of Panama and in the interest of establishing a long-term relationship. The Company reserves the right to protect itself with all options available to it pursuant to its contractual rights and under international law.
