Shares in Canadian mining giant First Quantum Minerals (TSX:FM) closed more than 3% higher on Tuesday, after the Panamanian Government said it would conduct an environmental audit to determine whether the Cobre Panama mine can safely re-open.
The copper mine — one of the world’s largest, accounting for roughly 5% of Panama’s GDP — was shut down at the start of December in a televised address by then-President Laurentino Cortizo. Protestors at the time had been calling for greater environmental protections, and a court ruling found the licence under which the mine operated was unconstitutional.
However, Panama’s new president, Jose Raul Mulino, who took office on Monday, has perhaps found a path forward.
“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 site,” he said in his first address as head of government on Monday.
“The plan to open and definitively close the mine in a safe and positive manner for our country will depend on the results of that environment study.”
Panama’s Trade and Industry Minister Julio Molto told Reuters that the government would “review and analyse all the information available to make an informed and responsible decision.”
Shares in First Quantum were up 3.06% to C$18.52 ($20.31) when the Toronto Stock Exchange closed yesterday.
The coming environmental audit follows the news last week that First Quantum was planning to launch a formal arbitration proceeding against Panama.
The company said in December that it had initiated proceedings against Panama at the International Court of Arbitration in Miami, Florida, seeking US$20 billion ($30 billion) over the closure of the mine.
In the initial stage of arbitration, concerned parties typically negotiate for a six-month period in an effort to avoid moving on to the launch of formal proceedings. However, First Quantum will now go ahead with that next stage, according to sources cited by Reuters.
“First Quantum will meet the July 30 deadline of launching a formal arbitration against Panama as it has a fiduciary duty to do so,” a source said.
Write to Oliver Gray at Mining.com.au
Images: First Quantum Minerals
