First Quantum Minerals (TSX:FM) estimates a constitutional challenge will have a US$3.5 billion ($4.9 billion) impact on revenue at its Cobre Panamá copper mine, located 120km west of Panama City in Panama.
A November 2023 Supreme Court decision ruled that the 20-year mine permit was unlawfully approved by the country’s government, resulting in major financial losses for the company, the national treasury, and workers.
“Had the mine been operating [in 2024 and 2025], it is estimated that Cobre Panamá would have contributed at least [US]$3.5 billion to the Panamanian economy over the two-year period,” First Quantum says in its latest tax transparency and economic contributions report.
“[The figure includes] approximately [US]$1.1 billion in taxes and royalties, approximately [US]$500 million ($699.16 million) in salaries and wages, and approximately [US]$1.9 billion ($2.65 billion) in local procurement.”
When the mine operated before 2024, its economic benefits accounted for an estimated 3% of Panama’s gross domestic product, according to the Associated Press. The mine permit also had the potential to be extended by 20 years.
However, anti-mining activists successfully argued that the operation will damage a biodiverse jungle on the Atlantic Coast and threaten water supplies.
Protestors applauded the verdict from all nine Panamanian Supreme Court justices, who unanimously declared the mine unconstitutional.
“This is what we had been waiting for … [and] the president has to suspend [mine] operations,” demonstrator Raisa Banfield tells the newswire agency.
The company acknowledged the court’s decision and affirmed its “unwavering commitment” to regulatory compliance in “all aspects of our operations within the country”.
First Quantum Metals is a copper mining company with assets across five continents and a global workforce of about 14,500.
Write to Richard Szabo at Mining.com.au
Images: First Quantum Metals
