Shares of First Quantum Minerals Ltd. tumbled on the Toronto Stock Exchange on Wednesday after a Panamanian government commission recommended winding down the company’s shuttered Cobre Panama copper mine in an orderly fashion.
The stock’s decline was so sharp that trading was halted twice by circuit breakers, an automatic mechanism meant to curb extreme short-term volatility. A third halt followed as the exchange sought contact with the company. At the point of that final halt, shares had fallen $14.02, or 31 per cent, to $31.10. Trading later resumed, and by late afternoon the stock had recovered some ground, closing down $6.13, or 13.6 per cent, at $38.99.
What the Commission Recommended
The government-appointed panel’s report calls for negotiating a new arrangement that would allow a temporary restart of the mine’s operations, with the goal of using that activity to help fund an eventual, controlled shutdown. The commission also recommended that Panama’s government resolve all outstanding arbitration claims that First Quantum has filed against it since the mine’s closure.
Julio Molto, Panama’s Minister of Commerce and a member of the panel, said an operation of this scale cannot be closed within a short timeframe, noting that such a process would take considerably longer than a year or even five. Felipe Chapman, Panama’s Finance Minister and another panel member, said shutting the mine outright would impose a significant financial burden on the Panamanian state and could strain public resources for years to come.
Background on the Mine’s Shutdown
Cobre Panama had accounted for roughly one per cent of global copper production before operations were halted in 2023. The shutdown followed a ruling by Panama’s Supreme Court that a 20-year contract granting First Quantum the concession to operate the mine was unconstitutional. The closure came amid sustained blockades and protests from local residents, environmental groups and nationalist organizations concerned about the mine’s impact on tax contributions and on a sensitive jungle ecosystem.
Panama’s President Jose Raul Mulino said at a news conference that he intends to closely review the commission’s findings before making a final decision on the future of the mine, which ranks among the largest open-pit copper deposits in the world.
Company Response
In a statement issued after the report’s release, First Quantum said it would engage constructively and in good faith to help establish a legal framework for Cobre Panama that is fair, transparent, durable and consistent with Panamanian law. The company said it believes a sustainable path forward must provide long-term stability for all parties involved, and that it is now awaiting guidance from Panama’s government on next steps for further engagement.
First Quantum Share Price Movement on TSX
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