First Quantum Shares Rise After Company Drops Arbitration against Panama

• First Quantum Minerals' shares rose by as much as 3.0% on the Toronto Stock Exchange early on Tuesday after the company said it had discontinued arbitration proceedings against the Panama government.
• The decision, announced on Monday, raises the prospect of negotiations to resume production at the Cobre Panama copper mine, which had contributed 1% of global copper production until the government of Panama shut it down following public protests in 2023.
• The suspension of output impacted both Panama's and the company's financial prospects. The next steps in the dispute depend on the actions of Panama's president. In addition to First Quantum, at least five other companies have filed arbitration cases against Panama over the closure of the Cobre Panama mine.
• First Quantum’s suspension of arbitration offers the Panamanian government a chance to renegotiate and potentially restart operations at the Cobre Panama mine—an economically critical project.
• The resumption of mining operations now appears increasingly likely, especially following President Mulino’s confirmation that formal negotiations would begin once arbitration proceedings were withdrawn. Nevertheless, significant resistance is expected from environmental groups and indigenous communities residing in the remote region where the mine is located, potentially complicating the path forward.
• Lilian González Guevara, executive director of the non-governmental Environmental Incident Center, pushed back against the economic argument for reopening the mine. She said that while many countries had struggled economically recently, Panama had grown even without the mine operating last year. “We haven’t depended on mining, it’s a fallacy,” she said. The only dialogue the group was open to having was about permanently closing the mine.

(Sources: Reuters and NCBCM Research)