Protests have broken out in the Central American nation of Panama, and a contract with a Canadian company – First Quantum Minerals – is at the centre of the unrest.

Here is a look at how we got here.

WHAT IS FIRST QUANTUM? WHAT IS ITS PRESENCE IN PANAMA?

First Quantum is a Canadian copper company that operates globally, with offices in Toronto and Vancouver. The company says it operates long-life mines in several countries. It is listed on the Toronto Stock Exchange. 

First Quantum’s Panama presence includes its newest operation, the Cobre Panama mine, considered its most lucrative asset. The company describes this mine as one of the largest new copper mines opened globally over the past decade, with three billion tons of “proven and probable” copper reserves. Commercial production started in 2019. 

In November 2017, First Quantum increased its ownership interest in the Panamanian company that holds the Cobre Panama concession, Minera Panamá S.A., to 90 per cent. 

WHAT IS THE LATEST ON THE PROTESTS IN PANAMA?

First Quantum reduced operations at its flagship copper mine in Panama on Monday as a result of protests and local opposition, the company said, including a blockade of small boats at its port that impacted delivery of key supplies. 

Thousands of protesters have taken to the streets in Panama in the last three weeks over a government decision to extend First Quantum’s mining license.

Panama’s president, Laurentino Cortizo, changed his position to oppose the project late last month, saying a referendum would be held, Bloomberg News reported.

The proposed referendum, as well as a push for the country’s congress to repeal the contract, have been set aside, and Panama’s government has said it will wait for the country’s Supreme Court rule on whether to end the agreement. Public arguments finish next week for two court cases relating to the Cobre Panama contract and a ruling from the Supreme Court could occur any time after that.

The protests stem from a 20-year extension to First Quantum’s assets. Panama’s government also received a larger share of revenue, according to Bloomberg News.

Environmentalists and student groups began blocking highways in October in opposition to the mining contract extension. The protests have seen clashes with police and the unrest has resulted in rising food prices in the capital city, Panama City, as farms were cut off.

The Associated Press reported last week that two people had died while participating in the third week of protests.

WHY ARE PEOPLE PROTESTING THE MINING CONTRACT?

Demonstrators have demanded the Panamanian government annul its contract that allows First Quantum to continue operation of its open-pit copper mine in a biodiverse jungle area.

Indigenous groups have said the mine threatens the area's delicate ecosystem.

Panama’s government, meanwhile, has said the mine is an important source of employment.

HOW HAS THE COMPANY BEEN AFFECTED?

Since Cortizo changed his posture on First Quantum’s operations in late October, the company has lost over 40 per cent of its value, according to reporting by Bloomberg News.

First Quantum said in a press release Monday that it has reduced operations at its Cobre mine by “ramping down one ore processing train while two remain operational.” 

The company said the disruption was due to an “illegal blockade.”

Investment expert Lyle Stein, president of Forvest Global Wealth Management, said in an interview with BNN Bloomberg on Monday that the situation shows how problems can arise when large amounts of capital are committed to smaller areas.

“Once it's all spent, you really are at the mercy of governments and now the populations that surround the mine. It is a big risk in mining investment, it's a big risk in global investment anywhere,” he said. “Diversification is big and in the case of First Quantum, Cobra Panama is a very big asset relative to its entire operation.”

With files from the Canadian Press, the Associated Press and Bloomberg News