A recent review conducted by Reuters of the campaign proposals and conversations with protest leaders reveals a bleak outlook for First Quantum Minerals (OTC:FQVLF) in its pursuit to reinstate the concession for a lucrative copper mine in Panama following the upcoming presidential elections in May.
Last year, protests against First Quantum (NASDAQ:QMCO) and its concession, driven by demands for heightened environmental assurances and transparency in negotiations, led authorities to nullify its contract for operating one of the world’s largest and newest copper mines. Consequently, all new metal mining permits were banned.
With metal traders and investors closely monitoring the election outcome for signs of a potential revival in mining activities, the race appears tight among the eight candidates set to appear on the May 5 ballot. Among the leading contenders, varying stances on the fate of the Cobre Panama mine emerge, ranging from vows to continue its closure to proposals for a referendum on the matter.
First Quantum, which experienced a nearly 50% market value decline post-concession annulment, remains cautious about the post-election scenario, with a spokesperson stating a commitment to observing the democratic process while refraining from speculation.
Interviews conducted by Reuters with leaders from five different protest groups shed light on the prevailing sentiment against resuming partnerships with First Quantum. While some advocate for a referendum, citing anticipated public opposition to mining activities, others express outright opposition, emphasizing a lack of trust in political promises.
Legal experts in Panama acknowledge the potential for First Quantum’s prospects to shift under local laws, but emphasize the necessity of public consultation to garner political support.
Meanwhile, First Quantum’s pursuit of $20 billion through international arbitration over Panama’s mine closure directive underscores the escalating legal battle. With proceedings initiated under the Canada-Panama Free Trade Agreement, Panama’s readiness to defend its interests signals a protracted legal dispute ahead.
Moody’s sovereign team acknowledges Panama’s resilient economy but warns of potential setbacks, including investor concerns permeating other sectors and the financial implications of arbitration compensation.
Notably, mining has not emerged as a prominent campaign issue among the presidential frontrunners. While some candidates remain silent on mining in their government plans, others advocate for public votes or propose constitutional amendments to ban mining outright, underscoring the diversity of opinions within the political landscape.
The uncertainty surrounding Panama’s stance on mining continues to exert influence on copper prices, with any indication of a policy shift potentially impacting global markets.
In this climate of uncertainty, the fate of First Quantum Minerals’ copper mine concession in Panama remains subject to the outcome of the upcoming elections and the complex interplay of legal, political, and economic factors.
