First Quantum might lose a shiny copper deal

Panama’s top court is currently weighing whether or not to block a Canadian mining giant from tapping into the region's copper.

Driving the news: A ruling by the country’s Supreme Court this week could squash First Quantum’s plans to mine copper at the Cobre Panama mine—which accounts for ~1% of global copper supply—by blocking a 20-year government deal.

Catch-up: Commercial operations at the mine have stalled for over a month due to blockades from protestors. Their concerns are largely over environmental issues but also that mineral wealth is being exploited by a foreign entity through unfavourable deal terms. 

  • Environmentalists warn the mine, which is located in Panama’s rainforest, will harm biodiversity and threaten water sources. Other protesters have alleged corruption.
  • If Panama ends the contract, it’s unlikely the company (or any company) will secure a new deal, thanks to a recent bill banning both new mining licences and extensions.

Big picture: Copper was a top priority for many Canadian miners this year: Barrick, the second-largest gold miner, wanted to acquire First Quantum for its copper interests, Teck sold its coal unit to focus on copper, and Ivanhoe just began copper exploration in Angola.

Yes, but: Panama’s ongoing protests, as well as protests at Peru’s major Las Bambas copper mine last year, show that new copper excavations won’t be without backlash.—QH