Shares in First Quantum Minerals (TSX: FM) rose 6.7% on Wednesday after Panama’s new president José Raúl Mulino said this week he would order an environmental study of the Cobre Panama mine site to see if it could re-open.
Company shares were similarly up earlier in the week following his speech on Monday when he was sworn in as the 39th president of the Central American country.
“I will order a strict environmental audit of the mine with the best international experts so that the country knows the truth about the state of the place, its surrounding rivers, flora and fauna and the possible dangers that its current situation represents to the environment, whether open or closed,” Mulino said in a video of his speech posted on X.
“Panama will choose the auditing company, which will have no cost to the state. The plan to open and close the mine in a safe and positive way for our country will depend on the result of the environmental study,” he said.
Post-turmoil government
Mulino, a diplomat, lawyer and politician has held several ministerial portfolios under previous administrations going back to the early 1990s. He was elected president after the May 2024 elections. Former president Laurentino Cortizo was ineligible for a second consecutive term under the country’s constitution.
Under the Cortizo administration, the Cobre Panama copper mine was forced to close following months of protests against the contract that First Quantum’s local subsidiary Minera Panamá and the Panamanian government signed last October.
That deal would have allowed the mine to continue operating for the next 20 years, but last November Panama’s Supreme Court ruled the agreement unconstitutional. The mine was ordered to halt operations in December.
The Vancouver-based company warned in April about environmental dangers posed by the long-term storage of copper concentrate at the mine site, after it was unable to export the stockpiled concentrate.
Economic driver
The massive Cobre Panama mine accounted for about 1.5% of global production of the critical metal, comprised about 5% of Panama’s GDP and 75% of its exports, and supported more than 40,000 jobs, directly and indirectly.
In production since 2019, the mine generated 112,734 tonnes of copper in the third quarter of 2023, contributing US$930 million to First Quantum’s overall third-quarter revenue of just over US$2 billion.
Company shares traded at $19.79 apiece on Wednesday morning, valuing the company at $16.5 billion. Its shares traded in a 52-week range of $9.31 and $39.13.
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