Panama considers reopening of First Quantum copper mine

Copper concentrate

WORLD copper supply could receive a boost after Panama said it would conduct an environmental audit that could lead to the re-opening of the 350,000 ton a year Cobre Panama mine.

Shares in First Quantum Minerals, which was forced to close the mine last year following a court review, improved about 6%.

President Jose Raul Mulino, who took office on Monday, made the announcement of an environmental audit in his first address as the head of the government. “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 on Monday in a report by Reuters.

He added that Panama will choose an auditing company and that will not generate any costs for the government.

Last week, Reuters reported that First Quantum was planning to launch a formal arbitration proceeding against Panama this month.

In December, a court in Panama found First Quantum’s mining licence contravened 25 articles of its constitution. The Toronto-listed miner had put $10bn into developing the 350,000 ton a year mine.

The closure of the mine forced First Quantum to sell $1bn in shares and raise a further $1.6bn from an offering of notes in an effort to strengthen its balance sheet. It was earlier reported that Barrick Gold and Jiangxi Copper, which owned 18% in First Quantum, were considering taking bids for the company.