Reuters | January 17, 2024 |
Aerial view of Cobre Panama mine. (Screenshot from First Quantum video | YouTube.)
Canadian miner First Quantum has delivered an initial preservation and management plan to the Panamanian trade ministry regarding its lucrative copper mine in the country, the miner’s Panamanian unit said on Wednesday.
The plan takes into account the “abrupt and unusual” cessation of operations before the end of the Cobre Panama mine’s useful life, it said in a statement, noting that the plan will be updated as conditions evolve.
The miner’s Toronto-listed shares slid after the announcement, falling 4.2% in morning trading.
First Quantum is dealing with the fallout of the Panamanian government’s decision in December to halt production at the mine following public protests, which accounted for more than 40% of the company’s annual revenue and is considered one of the biggest and newest copper mines in the world.
The month before, the country’s Supreme Court ruled that First Quantum’s contract to operate in Panama was unconstitutional.
Since the blow to its revenue, First Quantum has been looking at ways to shore up its finances. The company has said that it is exploring sales of smaller mines and looking to bring strategic equity partners for its large mines.
First Quantum on Wednesday said the preservation plan at the mine in Panama entailed costs estimated at “tens of millions of dollars a month.”
It added that it would retain around 1,400 employees at the site to carry out the preservation plan, but that “later there would inevitably be other reductions in the number of workers.”
Cobre Panama had previously requested to lay off thousands of workers at the site and on Tuesday offered voluntary retirement to more than 1,500 staff.
First Quantum said that the plan required “free and uninterrupted transit” by road and at a nearby port to deliver supplies to the site. Access to the mine has been strangled by protests and blockades in recent months.
(By Elida Moreno, Mrinalika Roy and Kylie Madry; Editing by Brendan O’Boyle and Mark Porter)
First Quantum offers voluntary retirement to over 1,500 Panama mine staff
Reuters | January 16, 2024
A Cobre Panama worker. (Image by Cobre Panama).
First Quantum Minerals, opens new tab on Tuesday offered voluntary retirement to more than 1,500 employees at its key Panama mine, a day after announcing a major restructuring to conserve cash, which included suspension of dividends.
The Canadian miner is dealing with the fallout of the Panama government’s decision in December to halt production at Cobre Panama mine following public protests, which accounted for more than 40% of the company’s annual revenue and is considered one of the biggest and newest copper mines in the world.
Because of the closure of the mine, Cobre Panama in December requested government authorization to lay off more than 4,000 of its employees.
Tuesday’s retirement offer is the second such plan announced by the company in Panama, and a total of 2,900 employees have now accepted the scheme, the company said.
The copper-gold miner had also announced job cuts in its nickel mine in Ravensthorpe at western Australia on Monday.
Since the big blow in Panama, First Quantum has been looking at ways to shore up its finances. The company has said it is exploring sale of smaller mines and looking to bring strategic equity partners for its large mines.
Reuters reported this month that First Quantum is in talks with it biggest shareholder Jiangxi Copper Co, opens new tab about selling stakes in its Zambian mines.
Scotiabank Global Equity Research said in note that First Quantum’s guidance on its restructuring and production remains neutral for the shares and it counts elevated geopolitical risks in Panama and Zambia as key risks for the company.
First Quantum shares closed with 1.27% gain at the end of trading at the Toronto Stock Exchange, while the benchmark index closed down by 0.54%.
(By Divya Rajagopal; Editing by Marguerita Choy)
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