Thursday, November 30, 2023

Labour shortages cost businesses $38B in potential revenue: CFIB report

BETTER PAY BENEFITS WOULD HELP

Canadian small businesses have lost more than $38 billion potential revenue because they had to decline contracts due to labour shortages, according to a new report from the Canadian Federation of Independent Business (CFIB). 

Businesses had to either turn down or postpone contracts or sales in 2022 because they lacked the workers to complete the jobs, the business group reported on Wednesday. The CFIB gathered data for the report by surveying 97,000 of its member businesses across Canada.

CONSTRUCTION MOST AFFECTED

Small operators in the construction sector lost the most business opportunities, the report highlighted, pegging the loss at $9.6 billion in 2022. 

"We always knew labour shortages came at a high price to small businesses," CFIB economist Laure-Anna Bomal said in a news release on the findings. 

“Staffing challenges cause employers to work more hours, reduce their hours of operation and decline services and contracts, simply because they can't find enough staff to fully operate their business.”

WHAT CAN BE DONE?

The organization suggested government policies that could help battle labour shortages, including work-integrated learning programs in high schools and labour mobility access programs. It also suggested a tax policy or tax credit to support “career extension”

"In the long run, the shortages will get worse, as will their costs, unless we change our labour market approach," Christina Santini, national affairs director at the CFIB, said in a written statement. 

"We urge governments to find innovative ways to increase participation in the labour market among all age groups.” 

Coinbase CEO praises Canadian regulators amid expansion

Coinbase CEO Brian Armstrong is bullish on the Canadian cryptocurrency landscape and its regulatory framework as the company begins its expansion into Canada.

In speaking at a fireside chat in Toronto on Tuesday to celebrate his company’s launch in Canada, Armstrong had high praise for Canadian regulators for making the guidelines simple.

“You're in a very lucky position that you have one federal regulator of both commodities and securities, in the U.S. that's turned into a bit of a jump ball,” he told those in attendance. “It's very political.”

“I think we just need sensible regulation and Canada has shown great leadership so far.”

In Canada, regulators treat cryptocurrency as a security, and companies entering the market must sign undertakings to comply with investor protections. The Ontario Securities Commission has issued a hardline on unregistered crypto exchanges, which ultimately resulted in FTX and Binance leaving the market.

“Canada can rightfully lord that over the U.S. that they are doing a better job creating regulatory clarity around crypto,” Armstrong said.

“I'll take some pointers home from this trip for our U.S. counterparts.”

Coinbase signed the undertakings in March and officially launched in Canada back in August. It has rolled out a partnership with Interac for e-transfer capability and the ability to withdraw Canadian dollars from their wallets.

There’s serious Canadian interest in crypto. A 2022 survey from the Ontario Securities Commission found that 31 per cent of Canadians intend to own crypto assets in the next year, while Coinbase ranks it as the third-most crypto-aware nation in the world.

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WHAT’S IN STORE FOR CRYPTO?

Coinbase started as a payments company, but shifted to a crypto trading in its early days. Armstrong believes the future still lies in payments, but processing delays need to come down before it will be adapted more widely.

“If you're going to a merchant, or you're going to some shop where you want to buy something, you don't want to be sitting there for five minutes waiting for the transaction to confirm,” he said.

“The aggressive milestone I've given the team is ‘How do we get these to under one second?’”

Armstrong also sees a reimagining of NFTs away from collectible art and more into a way for fans to support an artist or musician.

“Creative people, whether they're hosting a blog post, or they're a musician, or they're a video content creator, I think they're going to want to have a direct way to monetize with their fans,” he said.


Armstrong also sees a world in which crypto wallets such as Coinbase have built-in internet browsers, which would make crypto payments on the web much smoother.

“Self-custodial wallets in crypto may actually evolve to really be the next version of browsers, because it'll be the internet with an internet-native payment method built right in,” he said. “It's really incredible to think about that a lot of the commerce today does happen with people typing in this number from a credit card.”


Respondents to Bank of Canada questionnaire largely oppose creating a digital loonie

The Bank of Canada’s public consultations on the creation of a digital Canadian dollar reveal most respondents are opposed to it.  

The central bank released its findings Wednesday that show more than 80 per cent of respondents strongly opposed the Bank of Canada researching and building the capability to issue a digital dollar.  

The vast majority of respondents also said they do not trust the Bank of Canada to issue a secure digital currency. 

Among the top concerns was privacy, with many respondents valuing the anonymity associated with cash. Moreover, the questionnaire revealed low levels of trust in institutions to protect personal data. 

The central bank says it will explore options for a digital dollar where identification is not necessary for basic transactions, as is the case with cash.

The Bank of Canada noted the findings do not necessarily reflect the views of the overall public because participants self-selected to respond to the questionnaire. 

As more people go cashless, central banks around the world are researching the possibility of creating digital versions of currencies.  

A digital currency would be different from cryptocurrencies because it would be backed by the central bank and its value wouldn't change since it would be just another form of existing Canadian currency. 

In 2020, the Bank of Canada announced that it would build a contingency plan for the creation of a digital currency, should the need for it ever arise. 

While the public consultations aimed to gauge interest in a digital currency, the central bank said the decision to create a digital dollar is for Parliament to make. 

"Our responsibility is to ensure the Canadian payments system is ready for the economy of the future," Bank of Canada senior deputy governor Carolyn Rogers said in a statement. 

"The way people pay for things and use money is changing. If Canadians decide a digital dollar is necessary, our obligation is to be ready." 

Conservative Leader Pierre Poilievre has vehemently opposed the creation of a digital currency, proposing last year to ban the Bank of Canada from creating one.  

At the same time, he has previously promoted the use of cryptocurrencies and suggested it offered Canadians a way to opt out of inflation, though he has shifted away from the topic more recently.  

The central bank also sought out the thoughts of other stakeholders on the creation of a digital currency, including the financial sector and civil society organizations.

Financial sector stakeholders said they wanted more information on how a digital currency would work to better understand the implications for their business models.

The central bank says a digital currency would not pay interest, in order to mitigate the potential risk that a digital dollar would replace commercial bank deposits.

The Bank of Canada's engagement with civil society groups that advocate for Canadians with disabilities, consumers and low-income Canadians found these groups mainly supported a digital currency if its design would remove existing barriers.

This report by The Canadian Press was first published Nov. 29, 2023.

WORKERS CAPITAL

New Brunswick public sector pension plans to be transferred to shared-risk model

The New Brunswick government has introduced legislation to transfer five of its defined-benefit public sector pension plans to shared-risk plans, saying the move will ensure the sustainability of plans that have become unaffordable.

Premier Blaine Higgs says that under the legislation, the shift would be mandatory, meaning the proposed law would override provisions in collective agreements that guarantee union members a defined-benefit plan. 

Higgs says his Progressive Conservative government had tried to work out a deal with public sector unions, but he said it became clear the negotiations were headed nowhere as deadlines came and went.

The premier says the majority of government pension plans were shifted to shared-risk models 10 years ago, and since then the plans have performed well, adding 23 per cent to cost of living allowances since their inception.

By comparison, he says, the remaining defined-benefit plans — three of which he described as unviable — added between 16.5 per cent and 20 per cent to cost of living allowances.

The proposed change would affect 7,800 active pension plan members and would allow another 2,500 part-time employees to participate in a pension plan.

This report by The Canadian Press was first published Nov. 29, 2023.

Nasra.org

https://www.nasra.org/files/Spotlight/Risk%20Sharing%20in%20Public%20Retirement%20Plans.pdf

Traditional defined benefit pension plan featuring employee contribution rates that may change based on the plan's actuarial experience; a normal retirement age ...

Crr.bc.edu

https://crr.bc.edu/wp-content/uploads/2013/07/slp_33_508.pdf

Employer defined benefit pension plans have long advance. The Netherlands certainly offers one model been an important component of the U.S. retirement of risk ...

Vestcor.org

https://vestcor.org/wp-content/uploads/2014/02/Questions-and-Answers-actives-revised-Feb-10-2014.docx-Updated.pdf

There are two main reasons why defined benefit pension plans (the PSSA is a defined benefit pension plan) around the world are struggling with the issue of ...


Ottawa mulls removing 30% rule for pension fund investing

The federal government is looking at removing investing limits on Canadian pension funds buying into domestic companies.
 
As part of the fall economic statement, released on Tuesday, Ottawa said it is exploring the option of removing a 30 per cent cap on pension funds’ voting shares in corporations.
 
“The government will explore removing the '30 per cent rule' from investments in Canada. The 30 per cent rule restricts Canadian pension funds from holding more than 30 per cent of the voting shares of most corporations,” the fiscal document said. 
 
The change will also come with a transparency requirement requiring that all pension plan investments be disclosed to the Office of the Superintendent of Financial Institutions (OSFI), the document added.
 
Pension funds have “potential to boost Canada’s economy and create good careers for people across the country,” the government said in its economic update document.
 
One expert raised questions about how the changes will work in practice.
 
Bill Robson, chief executive officer of the C.D. Howe Institute, told BNN Bloomberg on Wednesday federal government could be addressing critics who say pension funds are not investing enough in Canada, Robinson said. 
 
However, the removal of the 30 per cent rule may not appeal to these types of investors, he added.
 
“If we want to see more investment in Canada by these big institutional investors, it’s not going to be through the public equity markets,” Robinson said. “I’m not sure about this direct ownership in a larger percentage. They need more of the kind of assets that they want to hold.”
 
He pointed to infrastructure, airports, roads and utilities as the preferred sectors pension funds like to invest in, but noted that a lot of these assets in Canada are government-owned.
 
Robinson argued that privatizing these kinds of projects would be more likely increase institutional investment.
 
“Suddenly you’d have this new very attractive asset class for these investors,” he said. 

A long-time Canadian institutional investor is in full support of removing the 30 per cent rule due to the benefits he thinks it will bring for pensioners. 

“It will have no impact in terms of incentivizing pension funds to invest domestically, but what it will do is return more money to pensioners,” John Ruffolo, founder and managing partner at Maverix Private Equity and former CEO of Omers Ventures, told BNNBloomberg.ca in a telephone interview on Wednesday. 

Pension funds already found legal mechanisms to get around the 30 per cent rule, he added, but they incurred costs to do so. 

“It really surprises me that it (the 30 per cent rule) stayed this long,” he added. 

One thing that caught Ruffolo's attention within the fiscal update proposal was the possibility of increased transparency for pension fund investments. 

"That rule is saying to the pension funds 'We can’t force you to invest more in Canada, but we’re kind of  watching,’" he said. 

 

Electric vehicle maker Lion Electric cutting 150 jobs to reduce costs


The Lion Electric Co. says it is cutting 150 jobs or about 10 per cent of its total workforce in a move to reduce costs and improve its ability to reach its profitability objectives.

Lion Electric chief executive and founder Marc Bedard says it was a difficult decision, but the right thing to do for the business.

The cuts affect workers in production overhead, manufacturing, product development and administrative functions, both in Canada and the United States.

Lion Electric designs and builds all-electric trucks, buses and minibuses. 

Earlier this month, the company, which keeps its books in U.S. dollars, reported a loss of US$19.9 million or nine cents per diluted share in its third quarter compared with a loss of US$17.2 million or nine cents per diluted a year earlier.

Revenue for the quarter ended Sept. 30 totalled US$80.3 million, up from US$41 million in the same quarter last year.

This report by The Canadian Press was first published Nov. 27, 2023.

 

Lawyer for pharma company argues against single trial in B.C. opioid damages case

Prescription pills

A lawyer for a pharmaceutical firm says holding a single trial in British Columbia to determine damages for each province and territory related to opioid health-care costs would be a "monster of complexity."

Gordon McKee, a lawyer for Janssen Inc. and Johnson & Johnson, told the B.C. Supreme Court that certifying Canadian governments as a class in their pursuit of damages against opioid makers isn't manageable or preferable compared with separate trials. 

McKee says the judge should not certify Canadian governments as a class in the case because it would "burden" B.C.'s justice system and have a negative affect on access to justice for other potential litigants. 

He says other courts in the past have recognized that some class-action lawsuits are "too big to certify," and there are enough separate issues in each province or territory that make a single trial unmanageable.

McKee says individual trials specific to each jurisdiction would be more suited and "appropriately spreads the burden" of the complex issues among provincial and territorial justice systems. 

A lawyer for the B.C. government asked the court this week to certify the class allowing provinces and territories to join their claims against the dozens of defendant companies, saying the actions are nearly identical claiming health care costs related to the opioid crisis that has killed or injured thousands of Canadians. 

This report by The Canadian Press was first published Nov. 29, 2023.


B.C. in court against pharma companies in bid to certify opioid class-action lawsuit

Prescription pills

The British Columbia government goes up against dozens of health care and pharmaceutical companies in court today in a bid to get certification for a class-action lawsuit over the costs of the opioid crisis.

It comes even after the Supreme Court of Canada agreed this month to hear a constitutional challenge by four of the companies who say a law allowing B.C. to recover costs on behalf of other governments is an overreach.

Those companies then went back to the Supreme Court of B.C. to seek a delay of the certification hearing while the high court rules, but the judge said an adjournment wasn't in the interests of justice.

The province began the legal odyssey in August 2018 by passing the Opioid Damages and Health Care Costs Recovery Act, seeking costs from firms alleged to have contributed to opioid addiction. 

B.C. declared a public health emergency in 2016 over the crisis, and since then nearly 13,000 people have died of overdoses in the province. 

The certification hearing is expected to last about four weeks and a civil trial would then have to be held to determine if the companies are liable for damages. 

This report by The Canadian Press was first published Nov. 27, 2023.

Federal politicians criticize Alberta Energy Regulator over oilsands leak, monitoring

Federal politicians have criticized the Alberta Energy Regulator at an environment committee meeting looking into two releases of oilsands wastewater at Imperial Oil's Kearl mine earlier this year. 

Liberal member of Parliament Adam van Koeverden tried to pass a motion expressing disappointment at the regulator's performance.

The motion, which wasn't voted on, also called for a study into the industry's health impacts, as well as safety audits for all oilsands tailings ponds. 

It followed a testy session that saw detailed questioning of Laurie Pushor, the head of the regulator. 

Pushor was asked repeatedly about evidence suggesting tailings are seeping from the ponds into groundwater.

He said some seepage is expected and managed.

Pushor said he couldn't offer much information while an internal investigation into the releases is underway.

Van Koeverden said after the meeting the motion was drafted out of frustration with Pushor's answers. 

This report by The Canadian Press was first published Nov. 28, 2023.


Alberta Energy Regulator reports runoff spill at Suncor's Fort Hills oilsands site


A spill of surface runoff from a containment pond at Suncor Energy’s Fort Hills oilsands site may have spanned more than a year, the Alberta Energy Regulator has announced. 

The regulator said that on Oct. 9, the energy company reported an “unplanned release” of around 662 cubic metres from the pond adjacent to Fort Hills into the Athabasca River. 

But on Nov. 24, Suncor informed the regulator that the spill was likely much larger than originally reported. 

"... Further investigation of this matter indicated the unplanned release volume may have been closer to 10,000 cubic metres," the regulator said a news release issued on Friday. "Suncor has also informed the AER that the unplanned release may have been in effect since June 2022 and believe the cause of the release is likely to be a faulty valve."

Suncor has taken water quality samples of the pond, the results of which indicate the water spilled into the river was “within release criteria parameters for discharge," the AER said. 

The pond the water was released from “is not related to mining, extraction or tailings processes, and contains precipitation and snow melt water," it said. 

Suncor also offered reassurances on Saturday that the water in question posed no threat.

"This water does not come into contact with any processes on our site," Suncor spokeswoman Jessica Depencier said in an emailed statement. 

She said testing in 2022 and 2023 showed the water in the collection pond met regulatory release criteria, and Suncor has "no evidence indicating any of the water that may have been released would not have met regulatory requirements. " 

The regulator said it visited the site and found the valve is not currently leaking, adding it will be reviewing sampling data from June 2022 through to November 2023. 

Depencier said the release was "potentially due to a valve that controls water flow from the pond to the river not being fully closed." The company confirmed the valve was completely closed on Oct. 9. 

She said Suncor company plans to "implement automated alarms to provide early awareness to changes in operating conditions."

Suncor and the AER have informed communities and stakeholders in the area, the regulator said, and Environment and Climate Change Canada has also been notified. 

This report by The Canadian Press was first published Nov. 27, 2023.

Poor Inuit housing 'direct result of colonialism': federal housing advocate


A federal housing advocate is accusing every level of government in Canada of failing to uphold the Inuit's right to housing — and therefore denying their human rights.

"The housing conditions that the Inuit inhabit are the direct result of colonialism and a staggering failure by successive federal, provincial and territorial governments over many decades," says a new report from Marie-Josée Houle.

"The level of distress cannot be understated, nor can the toll that being unhoused or precariously housed has on one's physical, mental and emotional health."

The human right to housing was recognized by Parliament in 2019 through the National Housing Strategy Act, which also saw the federal housing advocate appointed to ensure the government acts to make that right a reality.

For Inuit, the right to housing means having security of tenure, availability of basic services, affordability, and culturally appropriate dwellings.

Aluki Kotierk, president of Nunavut Tunngavik Inc., said none of Houle's finding are new for Inuit.

"We live with it," she said at a press conference in Ottawa on Monday.

She said she hopes that this time, Canadians will be forced to reckon with the findings of the report, such as how inadequate housing up North can affect someone's ability to be successful, finish schooling or take care of their health.

She noted the high number of youth in the Inuit population.

"Imagine if we were supported so that each of us could thrive, and how much we would contribute to Canada as a whole," she said.

Unfortunately, Inuit are right now "neglected," she said, struggling to make ends meet instead of thriving, sleeping on rotations in crammed houses, leaving school early and, at worst, taking their own lives.

To research the observational report about Inuit housing released on Monday, Houle travelled to northern communities on the invitation of Inuit Tapiriit Kanatami, the national organization that represents Inuit in Canada.

The non-partisan watchdog made the trip to hold discussions with community members and leaders in Nunavut and Nunatsiavut, in Labrador, in October of last year.

Her report paints a grim picture of what life in the North is like for Inuit.

It includes reference to one person in Nunatsiavut who burned down parts of their house to keep warm during the frigid winter months, and of people in Labrador who resort to sleeping in their cars or tents.

Houle found that in Happy Valley-Goose Bay, N.L., which has a population of just over 8,000 people according to the most recent census in 2021, the rate of homelessness was four times as high as that in Toronto and Vancouver in 2021-22.

The census found that more than half of Inuit living in their traditional territories lived in overcrowded housing, and nearly one-third were in homes that needed major repairs.

Those who do own homes in Nunatsiavut aren't necessarily in a better position, however, as Houle found there's a lack of accessible and affordable mortgages, along with home or tenant insurance.

According to the Nunatsiavut Executive Council, 78 per cent of the population cannot access home insurance.

The same issues are true for Inuit in Nunavut, where mortgages are tied to buildings and not land. This can lead homeowners to be left with high debts and no capital should their home burn down or be seriously damaged, Houle's report notes.

The housing advocate reported that some Inuit did not have water, sanitation or reliable access to heat or energy for their homes.

Washroom fixtures left in disrepair led to persistent leaks that increased water costs for some Inuit homeowners and led to moisture levels that provide an environment for harmful mould, Houle found.

The cold leads to its own set of problems.

For those with access to oil furnaces, the cost to operate a comfortable temperature indoors can cost up $57 per day in Nunatsiavut or up to $500 per week in Rankin Inlet, Nvt. — an expense some Inuit can't afford to pay.

In many northern communities, new housing simply isn't being built, Houle found.

Her report says the hamlet of Pangnirtung, Nvt., population 1,500, hasn't seen a new build in a decade. A single wait-list for public housing included 120 families as of March 2022, some of which had been on the list for more than 10 years.

In Rankin Inlet, where just under 3,000 people live, 15 housing units were built in 2022 and 20 units are planned for 2023, the report says.

But Houle heard that people feel abandoned.

The lack of stable housing is particularly difficult for those in need of mental health and addictions support.

And a "lack of long-term housing options continues to put Inuit women in Nunatsiavut at risk of having their children seized by the state," the report reads.

These problems are compounded by a high cost of living, high unemployment rates and a lack of access to daycare, Houle concluded.

The advocate also reported that overcrowding in Inuit housing is leading to the spread of tuberculosis and other viruses. Between 2015 and 2018, the rate of tuberculosis in traditional Inuit territories was more than 300 times higher than that of non-Indigenous Canadians.

NDP MP Lori Idlout, who represents Nunavut and serves as her party's Crown-Indigenous relations critic, says she hopes the report will reignite a conversation about the increasingly dire issue.

Idlout told the story of a young pregnant woman in Nunavut who knew she wouldn't be able to find housing for years to come. The woman chose suicide "instead of living with that reality," Idlout said.

It has been an uphill battle to advocate with the federal government to address the situation, Idlout said, adding she's already been trying for years.

"We're not being heard loud enough."

Houle's report includes a slew of recommendations.

She is calling on the federal government to transfer jurisdiction over Inuit housing programs to Inuit governments, and for all levels of government to recognize housing as a human right.

The report also says governments should work with Inuit regional organizations to develop addictions treatment plans, and to put adequate funding toward providing access to safe, adequate and affordable housing for all.

Idlout said the federal government "needs to realize how these investments could actually help Indigenous Peoples be the healthy, productive adults that they want to be so that they can contribute to Canada's economy. Because that's what we want to do."

This report by The Canadian Press was first published Nov. 27, 2023.

ALBERTA

Group opposes coal pit application until wastewater release probes complete

An environmental group says a coal company's application to deepen its open-pit mine shouldn't be considered while it's under investigation over wastewater releases into local rivers.

The Alberta Wilderness Association says CST Canada Coal in Grande Cache, Alta., must prove it can operate safely before the provincial regulator looks at its request. 

"Prior to any decisions on this application, the (association) respectfully requests (the Alberta Energy Regulator) complete the outstanding investigations of CST Canada’s operations and management," the group says in a statement to the regulator. 

CST Canada Coal operates open-pit coal mines in Grande Cache, about 430 kilometres northwest of Edmonton. In October, it applied for permits to deepen two of its pits by 155 and 210 metres. 

An approval would extend the mine's life by allowing it to reach about 3.3 million tonnes of steelmaking coal, company documents say.

But the wilderness association points out that three times within the last year, the CST mine has released large volumes of coal wastewater into the environment. 

On Dec. 29, 2022, more than 100,000 litres of coal wash water were released. On March 4, 2023, 1.1 million litres of tailings escaped into the Smoky River. And on June 19, heavy rains and regional flooding led to the release of an unknown amount of wastewater. 

Coal wastewater frequently contains selenium, a substance toxic to fish. 

The regulator has opened two formal investigations into CST, one for failing to meet the terms of its licence and one for failing to immediately report the release of a substance. 

"It is not environmentally responsible to approve further development of the No. 8 Mine until (the regulator) can enforce safe and efficient practices at CST Canada Coal," the association says. 

Inspectors from the regulator have also been on site this fall after three "rock-wall instabilities" in June, September and October — one of which partially buried a piece of heavy equipment and the operator inside it.

The association's statement concerns only the wastewater releases.

The regulator takes all factors into account when considering an application, said spokeswoman Teresa Broughton.

"All relevant operational performance and compliance history is considered during the application process," she said in an email. 

"We undertake a comprehensive administrative and technical review of all applications we receive to ensure the efficient, safe, orderly and environmentally responsible development of coal mining."

No representatives from CST responded to requests for comment. 

But the company has filed a response to the regulator over the association's concerns. 

"CST Coal takes matters such as these very seriously. However, CST Coal cannot comment on this matter as the investigation by the Alberta Energy Regulator into the alleged contraventions ... is ongoing," it says. 

The company added it is co-operating with the regulator's investigations and said the application is not connected to the wastewater releases. 

CST Coal is owned by CST Group, which is based in Hong Kong and incorporated in the Cayman Islands. It bought the mine in 2017 from the receiver after the previous owner, Grande Cache Coal, went bankrupt.

The mines are both open-pit and underground, company documents say. Most of its coal is exported to Japan, Korea and China.

CST employs about 300 people in Canada.

Its leases cover almost 30,000 hectares in the northwest Alberta foothills.

Air Transat flight attendants OK strike mandate if new contract cannot be reached

The union representing 2,100 flight attendants at Air Transat says workers have voted to approve a strike if they cannot reach a new contract with the airline.

The Canadian Union of Public Employees says the flight attendants voted 99.8 per cent in favour of backing the mandate.

Dominic Levasseur, president of the Air Transat component of CUPE, says the next few weeks of negotiations will be critical. 

Levasseur says it's still possible to reach a new contract without resorting to a strike, but the union's members have high expectations and are extremely motivated.

The collective agreement for the flight attendants based at airports in Montreal and Toronto expired on Oct. 31, 2022.

Air Transat is owned by travel company Transat AT Inc. 

This report by The Canadian Press was first published Nov. 27, 2023.

EXPLAINER: First Quantum, the Canadian miner at the heart of mining protests in Panama

This story was last updated on Nov. 29 to reflect recent developments.

Panama’s government plans to shut down a giant copper mine owned by Canada’s First Quantum Minerals Ltd., after a Supreme Court ruling found the mine’s contract was unconstitutional.

The recent developments follow weeks of anti-mining protests that have rocked the country and forced First Quantum to halt operations.

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 SITUATION IN PANAMA?

President Laurentino Cortizo said Tuesday that Panama’s government will start “the transition process for the orderly and safe closure of the mine.”

His statement posted on X came after a unanimous Supreme Court ruling that found the Cobre Panama’s mining contract license was unconstitutional. Cortizo did not say how long the process of closing the mine would take.

The court ruling followed weeks of protests from environmentalists concerned about Cobre Panama’s impact.

First Quantum didn’t immediately comment on the court decision, Bloomberg News reported.

But days earlier, the company took the first steps in an arbitration process with Panama over the mining contract at the heart of the mass protests.

The company said it issued an arbitration notice on Sunday to the administration of Panama’s president, Laurentino Cortizo.

Last month, Panama extended the company’s mining license but later reversed its position and proposed to put First Quantum’s future operation in the region to a vote. 

The proposed referendum, as well as a push for the country’s congress to repeal the contract, were set aside as the government awaited the Supreme Court’s ruling on whether to end the agreement. 

Last week, the company ceased commercial production as a port blockade of small boats prevented the delivery of key supplies. 

Earlier this month, First Quantum reduced operations at its flagship copper mine in Panama as a result of protests, local opposition and the blockade, the company said

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

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.

On Sunday a group of protestors attacked workers that were leaving the mine, according to a union leader. The Associated Press reported earlier this month 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, First Quantum has lost about half of its market value. 

Last week the company ceased commercial operations amid a port blockade that restricted incoming supplies. 

That followed an earlier reduction in operations at Cobre Panama this month, when First Quantum said in a press release it was “ramping down one ore processing train while two remain operational” due to an “illegal blockade.”

Investment expert Lyle Stein, president of Forvest Global Wealth Management, said in an interview with BNN Bloomberg earlier this month 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 Holly McKenzie-Sutter, The Canadian Press, The Associated Press and Bloomberg News.

 

Panama mine shutdown threatens copper’s surplus

Bloomberg News | November 30, 2023 |

Cobre Panama mine is First Quantum Minerals’ largest copper operation. (Image courtesy of Cobre Panama.)

A plan to close a major mine in Panama is threatening to upend the global copper market by whipsawing the industry back into a period of tighter supply.


Until recently, the broad consensus among forecasters was that copper would enjoy a comfortable surplus for the next few years, before tightening sharply later in the decade as supply struggles to keep up with surging demand for the energy transition.


The expectation for a looser market in the near term has been reflected in copper prices, which drifted sideways for most of this year, while inventory levels on the London Metal Exchange bounced back from perilously low levels to hit a two-year high last month. In early October, the International Copper Study Group said it expects a surplus of 467,000 tons next year — its largest forecast for a glut since 2014.

Now, the news that Panama intends to shut down one of the world’s biggest and newest copper mines threatens to disrupt that trajectory. Copper prices have risen about 6% since the protests erupted in Panama, and touched a 10-week high earlier on Wednesday before retreating.

Shrinking surplus

First Quantum Minerals Ltd.’s $10 billion Cobre Panama operation produces about 1.5% of the world’s copper supply, and boasts estimated copper resources worth more than $100 billion at current prices, according to Bloomberg calculations.

The project has been the target of protests across the central American country over the past six weeks, culminating in Tuesday’s announcement by President Laurentino Cortizo that authorities will start a process to close the mine after a supreme court ruling against it.

The Canadian company, which had already temporarily stopped production after protesters blocked supplies from reaching the mine, said on Wednesday it was still open to dialog and would seek clarification from the government, while listing a large number of concerns regarding a potential closure. Some analysts have suggested the mine could reopen under a new government after Panama’s election in May, if the company is able to renegotiate new terms.



But based on its estimated annual production of as much as 375,000 tons this year, a prolonged or permanent shutdown at Cobre Panama would erode most of the ICSG’s predicted surplus in 2024. The effect would be even more dramatic using a surplus of 355,000 tons forecast by Citigroup Inc. analysts.
Concentrates pressure

The shutdown at Cobre Panama comes at a particularly sensitive time in the market for copper concentrates, an intermediate product used to make refined metal, as Chinese smelters negotiate processing fees for next year with key mining suppliers.

In the first of such deals, Chilean miner and Antofagasta Plc and smelter Jinchuan Group agreed to copper-concentrate supply contracts for 2024 that set processing charges 9% lower than this year.



The drop is a sign of how the concentrate market has been tightening — partly because of a massive expansion of Chinese smelter capacity, which increases competition for the feedstock, and partly because of concern about the future of Cobre Panama — even before the president’s announcement on Tuesday.

“This is a significant event, adding uncertainty to the supply outlook,” said Craig Lang, principal analyst at researcher CRU Group. “This is likely to place further downwards pressure on copper concentrate market terms as smelters and traders look to cover Panama supply with alternative sources of material.”
Refined flows

Cobre Panama is a major supplier of concentrate to the Chinese market, where visible stocks of refined copper remain near multi-year lows, as robust consumption by electricity grids and the renewable energy industry counter depressed demand elsewhere.

A further tightening of the market could increase the flow of refined metal into the country, depleting stockpiles held elsewhere that have only partially recovered from the low levels seen earlier this year.

The supply disruptions also come as China is becoming increasingly aggressive in taking measures to shore up its ailing property sector, a significant pillar of global copper demand, while a slump in global bond yields makes the metal more attractive to investors.

And Cobre Panama isn’t the only mine facing disruptions. Workers at MMG Ltd.’s copper mine in Peru — another large operation — began a strike this week but will return to work on Thursday after authorities declared the action unfounded.

“For the past five years in a row, the mine disruption rate has been above the average of this century,” CRU Group’s Lang said.

(By Eddie Spence and Mark Burton)

First Quantum risks covenant breach, cost cuts if Panama shuts copper mine

Bloomberg News | November 30, 2023 | 

Cobre Panama mine began producing and shipping copper concentrates in June 2019. (Image courtesy of Cobre Panama.)

First Quantum Minerals Ltd. could be forced to slow spending next year and face a potential breach of debt covenants if Panama follows through on plans to close a copper mine that generated roughly $1 billion in profit last year.


The Cobre Panama mine has been the Canadian firm’s top money maker since its 2019 opening and was expected to account for almost half of worldwide sales next year. Now, after the government announced plans to shutter the $10 billion operation, First Quantum may have to trim spending elsewhere or sell assets in order to remain in compliance with lender agreements.

The company is facing an estimated $625 million in debt maturities next year and another $1.8 billion in 2025, according to Citigroup. Without Cobre Panama’s revenue, the company appears likely to violate some debt covenants, chief financial officer Ryan MacWilliam told a conference hosted by Bank of Nova Scotia on Wednesday. First Quantum shares dropped 10% to a three-year low.



First Quantum’s $1.3 billion of 8.625% bonds due 2031 was quoted at 79.5 cents on the dollar, according to Trace bid prices Wednesday. That compared with around 86.5 cents a month earlier.

MacWilliam’s remarks capped a dramatic six weeks during which protests erupted in Panama over a decision to approve a new operating contract for the mine. President Laurentino Cortizo initially shocked investors by announcing a referendum on the project before backtracking to await a ruling by the Supreme Court. On Tuesday, the court unanimously ruled the law approving the contract was unconstitutional.

It’s as-yet unclear how serious the risk is of a permanent closure of Cobre Panama. That said, First Quantum would post negative free cash flow of about $300 million a quarter without it — at least initially, Citigroup Inc. analysts wrote in a note to clients.

First Quantum could partially salve the wound of Cobre Panama’s loss by slowing spending in other regions next year.

“There are levers they can pull in terms of non-core asset sales or capital cost reductions,” said National Bank of Canada analyst Shane Nagle. “The biggest financial hurdle will be coming close to the covenants on the revolving credit facility by this time next year without Cobre Panama in operation.”

The firm had previously planned to spend $1.8 billion on expansion projects in coming years, including $535 million in Zambia. New corporate guidance is expected to be disclosed in January, according to a Scotiabank analyst note.

(By Jacob Lorinc and James Attwood)

Panama copper miners take to the streets in backlash to shutdown

Bloomberg News | November 29, 2023 | 

New contract awarding a 20-year extension to First Quantum’s mining license has led to relentless protests. (Image courtesy of News of the World (NOW) | YouTube.)

Staff and contractors at First Quantum Minerals Ltd.’s Panamanian copper mine staged demonstrations across the country Wednesday, demanding the government protect their jobs or ensure they receive compensation if they are laid off.


Workers marched through city streets, blocking roads and waving flags, a day after the Supreme Court ruled the law governing a new contract for the Cobre Panama mine was unconstitutional. Some carried signs that read “You also use 100% Panamanian copper.”

The backlash from members of the mine’s 7,000-strong workforce — as well as suppliers and contractors that account for a total of about 40,000 jobs — comes as anti-mining protesters celebrate President Laurentino Cortizo’s pledge to respect the court’s ruling and begin the process of closing the mine.

While environmentalists and some other non-mining labor unions have held protests since Oct. 20 when Congress passed the new contract, workers are fighting to keep their jobs — or at least receive proper compensation.

“This is a source of income for more than 40,000 households, and we don’t have a response as to what is going to happen to us,” union leader Michael Camacho told reporters. “We demand the government and the labor ministry respect our rights.”



Samuel Diaz, a spokesmen for suppliers of the mine, said more than 2,500 companies will be affected by the closure, and that many of those firms have already seen revenue decline over the past month amid uncertainty about the operation’s future.

Meanwhile, a construction workers union that’s against the mine vowed to stay on the streets until it’s closed. Other groups of anti-mine demonstrators, including environmentalists and civil groups, celebrated the court’s decision Tuesday night, blocking roads and setting off fireworks.

The $10 billion mine finds itself at the center of a tussle between economic development and prosperity and protecting the environment and national sovereignty. The mine accounts for more than 1% of global mined copper and delivers the government hundreds of millions of dollars a year in revenue.

First Quantum weighed in Wednesday, saying in a statement that the court’s ruling and Cortizo’s comments “do not take into account the rights of thousands of Panamanians who depend on the Cobre Panama mine and mining for their livelihood.”

(By Michael McDonald and James Attwood)

Panama orders First Quantum’s copper mine closure

Cecilia Jamasmie | November 29, 2023 


President Laurentino Cortizo. 
(Image courtesy of President President Laurentino Cortizo’s X account.)

Panama has asked Canadian miner First Quantum Minerals (TSX: FM) to halt its Cobre Panama copper mine following a ruling by the Supreme Court that declared the mining contract for the operation unconstitutional.


President Laurentino Cortizo took to social media late on Tuesday to announce his government had started “the transition process for the orderly and safe closure of the mine.

The top court’s ruling capped six weeks of protests and official announcements over a contract that gave First Quantum 20 years of mining rights over the giant copper asset, with an option to extend the deal for another 20 years in return for $375 million in annual revenue to the Central American nation.

Challenges against the contract piled up in court following massive protests against the contract, which almost paralyzed the country.

Public figures including climate activist Greta Thunberg and Hollywood actor Leonardo Di Caprio backed the protests and shared a video calling for the “mega mine” to cease operations, which quickly went viral.

First Quantum’s local unit Minera Panama said in a statement on Wednesday that is interested in pursuing dialogue with the country’s government. It warned the court’s decision doesn’t touch several important points, such as how the government plans to prevent the arrival of illegal miners or what is going to happen to the more than 40,000 people directly and indirectly employed by Cobre Panama.

Workers staged demonstrations across the country later in the day, asking the government to protect their jobs or at least ensure they receive compensation if they are laid off.

Panama’s decision will have consequences for the copper market, as Cobre Panama mine accounts for about 1.5% of global production of the metal.

It will also affect the government’s coffers. The mine accounts for about 5% of its GDP and makes up 75% of Panama’s export of goods.

It is also likely to lead to international arbitration. First Quantum on Sunday sent Panamanian authorities a notification of intent to start arbitration proceedings.

It later clarified the move was not the beginning of a legal procedure, but rather “a formality required by international treaties, with the purpose of opening a dialogue period of at least 90 days between the parties.”

“Pursuing international arbitration to recoup the massive financial loss of Cobre Panama would likely take years to resolve,” Orest Wowkodaw, analyst with Scotia Capital Inc. wrote in a note to clients. “However, we believe this course of action could ultimately bear fruit.”

Cobre Panama, in production since 2019, generated 112,734 tonnes of copper in the third quarter of 2023, contributing $930 million to First Quantum’s overall third-quarter revenue of $2.02 billion.

Analysts at BMO Capital Markets believe that First Quantum is in a financial position that allows it to weather the storm in the short term.

“Under our base-case scenario which assumes Cobre Panama mine closure through 2023 year-end, First Quantum has sufficient liquidity,” BMO analyst Jackie Przybylowski wrote.

Challenges, she added, would arise if Cobre Panama remained halted for 80 days in 2024, as this would draw First Quantum’s cash down to zero at the bank’s current commodity and cash outflow assumptions.
“Tricky” spot

A closure for the first half of the year, beyond the May 2024 presidential election, would result in a $267 million cash shortfall, Przybylowski said. This estimation doesn’t including cash reserves required for working capital.

“The primary goal of the government and courts today appears to be calming the protests,” Przybylowski wrote on Tuesday. “We are optimistic that this approach will be successful, and that protests around the Cobre Panama port will subside, with mining operations likely to resume relatively quickly if protests are lifted.”

Lawyers contacted by MINING.COM said both the Panamanian government and First Quantum are now in a “tricky spot” since Cortizo’s administration passed a bill on Nov. 2 banning all new mining concessions and extensions. That could prevent the two parties from negotiating a new deal.


Panama’s top court rules First Quantum contract unconstitutional
Cecilia Jamasmie | November 28, 2023 | 

Copper shipments from Cobre Panama mine. (Image courtesy of Cobre Panama.)

Panama’s Supreme Court ruled on Tuesday that First Quantum Minerals’ (TSX: FM) contract to operate its giant Cobre Panama copper mine, the only mining operation in the Central American country, is unconstitutional.


Challenges against the contract, which would have allowed Cobre Panama to keep operating for the next 20 years, piled up in court following public protests against the deal inked in October by the government and First Quantum’s local subsidiary, Minera Panama.

The court began deliberations on Friday and continued over the weekend. It announced a 12-hour break at the end of Monday’s session, delivering its verdict in in the early hours of Tuesday morning. The announcement was streamed live and watched by almost 24,000 people just in the first hour.

The court’s president Maria Eugenia Lopez said the vote against the contract had been unanimous, adding the ruling will now be published in the country’s official government newspaper.

President Laurentino Cortizo said in a post on X Tuesday that his government was ready to start “the transition process for the orderly and safe closure of the mine.”

First Quantum said in a statement that it was reviewing the ruling and that it “continues to reserve all its local and international legal rights in regards to developments in Panama.”

The Supreme Court decision adds to a growing list of questions surrounding First Quantum’s Cobre Panama mine and its implications.

Lawyers contacted by MINING.COM agree that the most immediate effect would be a freeze of First Quantum’s operations in the country. This doesn’t mean much though, they said, as Cobre Panama has been halted since Friday.

A previous contract was ruled illegal once before, in 2017, but the mine continued to operate as usual while both parties negotiated a new deal. Unprecedented public anger against the project this time may force the government to adopt a stricter approach, local sources said.

Multi-layer earthquake


The ruling will have consequences for the copper market, as Cobre Panama mine accounts for about 1.5% of global production of the metal.

It will also affect the government’s coffers. The mine accounts for about 5% of its GDP and makes up 75% of Panama’s export of goods, supporting at least 40,000 jobs, directly and indirectly.

It is also likely to lead to international arbitration. First Quantum on Sunday sent Panamanian authorities a notification of intent to start arbitration proceedings. It later clarified the move was not the beginning of a legal procedure, but rather “a formality required by international treaties, with the purpose of opening a dialogue period of at least 90 days between the parties.”

“Pursuing international arbitration to recoup the massive financial loss of Cobre Panama would likely take years to resolve,” Orest Wowkodaw, analyst with Scotia Capital Inc. wrote in a note to clients. “However, we believe this course of action could ultimately bear fruit.”

Panama legislators had ratified the new contract between the executive and First Quantum, but reconsidered their decision after massive protests — the largest since a cost of living crisis last July — almost paralyzed the country.
Demonstrations against the contract have turned into an anti-government, end-to-all-mining movement. (Image: Screenshot of stock video.)

The land and sea ongoing demonstrations blocked the delivery of crucial supplies to the mine, forcing First Quantum to halt operations again this week. The protests have also affected farmers, schools, emergency services and a long list of businesses unable to keep up activities due to lack of staff and supplies, stranded along the many blocked routes in and out the capital city.

Over the weekend, demonstrators received endorsements from climate activist Greta Thunberg and Hollywood actor Leonardo Di Caprio, who shared a video calling for the “mega mine” to cease operations.

Cobre Panama, in production since 2019, generated 112,734 tonnes of copper in the third quarter of 2023, contributing $930 million to First Quantum’s overall third-quarter revenue of $2.02 billion.

Analysts at BMO Capital Markets believe that First Quantum is in a financial position that allows it to weather the storm in the short term.

“Under our base-case scenario which assumes Cobre Panama mine closure through 2023 year-end, First Quantum has sufficient liquidity,” BMO analyst Jackie Przybylowski wrote.

Challenges, she added, would arise if Cobre Panama remained halted for 80 days in 2024, as this would draw First Quantum’s cash down to zero at the bank’s current commodity and cash outflow assumptions.

A closure for the first half of the year, beyond the May 2024 presidential election, would result in a $267 million cash shortfall, Przybylowski said. This estimation doesn’t including cash reserves required for working capital.

“The primary goal of the government and courts today appears to be calming the protests,” Przybylowski wrote on Tuesday. “We are optimistic that this approach will be successful, and that protests around the Cobre Panama port will subside, with mining operations likely to resume relatively quickly if protests are lifted.”

Shares in First Quantum were down 3% to A$9.07 in Toronto on the news Tuesday. Uncertainty around its flagship mine in Panama had already wiped about C$10 billion off First Quantum’s market value, almost 50% of it, since Cortizo decided to call a referendum on the contract. The popular vote was cancelled and the final decision was ultimately placed in hands of the Supreme Court.

Amid protests and the failed referendum, Panama legislators passed a bill that originally sought to revoke First Quantum’s contract, but ended up banning all future mining concessions, including exploration, extraction and transportation of minerals, as well as contract renewals in Panama.

 Panama to shut down First Quantum mine after ruling, president says

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Panama’s government said it will shut a giant copper mine owned by First Quantum Minerals Ltd., damping hopes that the company might be able to reach a new deal to keep operating.  

Authorities will start “the transition process for the orderly and safe closure of the mine,” President Laurentino Cortizo said in a post on X Tuesday, after the nation’s supreme court ruled against the miner. 

The move will deprive the government of one of its biggest sources of revenue and increases the chances of a legal battle between the Canadian miner and Panama in international arbitration. Cortizo didn’t say how long the process might take. 

On Tuesday, the court ruled against a law approving a contract, sealing the doom of an operation that produces more than 1 per cent of global copper output. 

Earlier, the company’s shares fell as much as 8.3 per cent in Toronto before paring most losses as copper prices on the London Metal Exchange rose. Panama’s dollar bonds dropped as the government faces the prospect of losing a large source of revenue.

The company declined to comment on Cortizo’s statement. 

‘TERRIBLE’ OUTLOOK

The implications of the mine closure for Panama’s fiscal outlook are “terrible,” said Ricardo Penfold, a managing director at Seaport Global.

“The country is running a fiscal deficit of 5 per cent of GDP and this will increase it by about 0.6 per cent,” Penfold said, in a written reply to questions. “And then you have the lawsuit.” 

Mass protests erupted last month after Panama’s congress approved a new contract with First Quantum, which has since been forced to suspend production due to protesters’ blockades.

Environmentalists, labor unions and others have held protests since Oct. 20 when congress passed a contract that gives First Quantum the right to produce copper for 20 years, with the option another 20-year extension.

Demonstrators argue that the contract violates national sovereignty and didn’t receive sufficient public debate prior to its approval in the legislature. 

First Quantum began to wind down operations last week as small boats blocked the mine’s port, preventing the company from shipping supplies to the mine, while protesters and mining personnel clashed have clashed along the road to the site’s entrance.



Nov 28, 2023


Panama judges throw doubt on future of First Quantum mine

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Panama’s top court ruled against a law approving a contract with First Quantum Minerals Ltd., throwing into doubt the future of one of the world’s biggest copper operations.

The company’s shares fell as much as 8.3 per cent in Toronto before paring most losses as copper prices on the London Metal Exchange rose 1.3 per cent on upbeat economic expectations in China and tight supply. Panama’s dollar bonds dropped as the government faces the prospect of losing a large source of revenue.

The ruling raises the possibility of a long and expensive legal battle between First Quantum and Panama if the dispute moves to international arbitration. Mass protests erupted last month after Panama’s congress approved a new contract with the Canadian miner, which has since been forced to suspend production because blockades mean it can’t access the supplies it needs.

Local lawyers are split over whether the decision means First Quantum must shut its operation immediately. A previous contract was ruled unconstitutional in 2017, but the mine continued to operate. However, the outpouring of popular fury against the project may force the government to take a harder line.

First Quantum sent an arbitration notice to the government of Panama over the weekend following disruptions at its port in the country. The US$10 billion operation produces more than one per cent of global copper output.

“We want to affirm our unwavering commitment to regulatory compliance in all aspects of our operations within the country,” a First Quantum spokesman said in a written message. “We will comment further as additional details on the ruling are made public.”

The vote against the full contract was unanimous, the Supreme Court’s president Maria Eugenia Lopez told reporters on Tuesday. The ruling must now be published in the country’s official gazette, she said.

‘TERRIBLE’ IMPLICATIONS

Local attorney Victor Baker, who filed an opinion on the case with the Supreme Court, said the ruling applies to the law approved in congress, not the underlying contract. Therefore a new contract can be drafted and the mine can operate in the meantime, he said, in a written reply to questions.

But Martita Cornejo, an attorney who filed the constitutional challenge, says declaring the law unconstitutional effectively voids the contract, and that the mine must close immediately.

The country’s most liquid dollar notes due in 2036 fell as much as 0.6 cent to 95.6 cents after the ruling, according to indicative price data compiled by Bloomberg.

The implications for the nation’s fiscal outlook are “terrible,” said Ricardo Penfold, a managing director at Seaport Global.

“The country is running a fiscal deficit of 5 per cent of GDP and this will increase it by about 0.6 per cent,” Penfold said, in a written reply to questions. “And then you have the lawsuit.” 

Environmentalists, labor unions and others have held protests since Oct. 20 when Congress passed a contract that gives First Quantum the right to produce copper for 20 years, with the option of another 20-year extension.

Demonstrators argue that the contract violates national sovereignty and didn’t receive sufficient public debate prior to its approval in the legislature. Anti-mining roadblocks and violent protests have caused at least $1.7 billion in losses to business, according to the country’s National Council of Private Enterprise.

First Quantum began to wind down operations last week as small boats blocked the mine’s port, preventing the company from shipping supplies to the mine, while protesters and mining personnel clashed this week along the road to the site’s entrance.

First Quantum and the government reached the new arrangement for the mine in March, extending the Vancouver-based firm’s contract and providing the government with a bigger share of profits. The deal required congressional approval before becoming law.


Truckers are stranded due to the protests that have been going on in Panama for more than a month in rejection of a mining contract, in Chiriquí, Panama, 27 November 2023. EFE/ Marcelino Rosario

Truckers stranded in Panama due to anti-mining protests denounce ‘inhumane’ conditions

David, Panama, Nov. 27 (EFE) – Freight drivers, many from Central America, denounce that they are facing “inhumane and unhygienic” conditions in the roadblocks that have been in place in Panama for more than a month to protest against a mining contract signed by Congress.

One such driver is Panamanian Ernesto Rey, who was stranded in Chiriquí, the province bordering Costa Rica, on his way back to Panama City from the neighboring country.

Like many other truckers returning from Central America, he has not seen his family in weeks, although, as he told EFE, he is fortunate to be parked near a gas station.

The prospect of being stranded in heavy traffic far from a gas station or a town would an “unhygienic and inhuman” situation, he told EFE.

“There is no bathroom (to take a shower), there is no toilet and there is nothing,” he says angrily and complains bitterly that “the truckers always pay the price” when there is a roadblock.

The line of stranded trucks can be seen along the Pan-American Highway – the country’s main highway – from Paso Canoas, the border with Costa Rica through Chiriquí, to Ojo de Agua in Veraguas, the next province over.

The roadblocks are in protest against the contract awarded to Minera Panamá, a subsidiary of the Canadian company First Quantum Minerals, for the exploitation of a large copper mine approved by the Panamanian Assembly.

The trucks carry goods coming from Asia, the United States and Europe to Central America through Panama’s Colón Free Zone, the largest on the continent, and the port system connected to the Panama Canal.

There are also trucks that bring manufactured goods of all kinds, including medicines, to Panama, where more than 80% of what is consumed is imported, including soap, cookies, beverages and other products that are now stranded in the canal, Carlos Eliécer Argueta, vice president of Panama’s National Chamber of Freight Transportation, told EFE.

Chiriquí, an important vegetable-producing area, is the area most affected by the blockades by indigenous groups and unions, which have caused shortages of basic products, gas and fuel.

Some representatives of employers’ associations have reported that drivers are victims of theft and other crimes.

Camioneros se encuentran varados debido las protestas que se registran en Panamá desde hace más de un mes en rechazo a un contrato minero, en Chiriquí, Panamá, 27 de noviembre de 2023. EFE/ Marcelino Rosario

Incalculable losses

The economic losses to the freight transportation sector, a neuralgic node in Panama’s powerful logistics system, are growing by the hour, Argueta said.

“There is no way to calculate the losses. Panama receives daily 250 18-wheelers from Central America,” he added.He also emphasizes that due to this situation, the Colón Free Zone “has lost the two best months of commercial sales”, the Christmas and New Year’s seasons.

The blockades, which also occurred in the Caribbean province of Colón, have almost paralyzed the free zone and affected the movement of cargo between the Atlantic and Pacific ports, as explained to EFE by businessmen of the sector, who emphasize the loss of Panama’s reputation as a safe supplier of logistics services, which represent 30% of the GDP.

Transporters ask for help

Panamanian and foreign transporters stranded on the Pan-American Highway are asking for someone to intervene to reopen the road, as they claim to feel alone.

This “kidnapping” situation, as spokesmen for the Panamanian employers have described the blockades, is keeping the north of the country in a crisis of fuel and food shortages.

“(The protesters) publish on social media when they open a road, but when the vehicles arrive at the next intersections of the closures it’s the same thing: the trucks are blocked and can’t get through,” Rey said.

On Sunday, the government of El Salvador asked Panama for a humanitarian corridor to allow the exit of heavy cargo drivers who have been stranded in Panama for “more than 30 days” due to the blockades.

Expectations are high in Panama for a possible declaration of unconstitutionality of the mining contract, which would put an end to more than a month of protests in the country. EFE

El Salvador’s Plea Amidst Panamanian Crisis: A Humanitarian Corridor for Stranded Truck Drivers

By: BNN Correspondents
Published: November 27, 2023 


As the world watches in anticipation, the humanitarian crisis in Panama triggered by protests against a mining contract with Canadian company First Quantum Minerals (FQM) continues to unfold. El Salvador has now appealed to the Panama government and its civil society leaders, pleading for the formation of a humanitarian corridor to aid Salvadoran truck drivers stranded due to relentless roadblocks.

Consequences of the Blockade

The blockades, a form of dissent against FQM’s right to operate in Panama’s Caribbean zone for the next 40 years, have been in place since October 20. This prolonged disruption has led to a shortage of basic commodities and an estimated economic loss exceeding $1.7 billion, as reported by various business associations. The blockade has not only affected Panama’s economy but also stranded Salvadoran truck drivers, who have been unable to leave the country for over a month.

The Call for a Humanitarian Corridor

El Salvador’s desperate appeal for a humanitarian corridor signifies the severity of the situation. Its purpose is to ensure the safe exit of their stranded citizens, who have been receiving food and health assistance from the Salvadoran embassy in Panama for more than a month now. The plight of these drivers sheds light on the collateral damage caused by this socio-political impasse.

Awaiting the Supreme Court’s Decision

The Supreme Court of Panama is currently reviewing the constitutionality of the mining contract with FQM. The justices are expected to remain in continuous session until a decision is reached, a verdict that could potentially lead to the shutdown of Central America’s largest open-pit copper mine. This decision holds potential implications not only for the protesters and the mining company but also for the trapped truck drivers and the overall state of Panama’s economy.

First Quantum turns to arbitration ahead of Panama court ruling

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First Quantum Minerals Ltd. took the first step in an arbitration process with Panama as the Canadian firm's flagship copper operation faces anti-mining protests and a Supreme Court ruling on whether its contract is constitutional.   

The company said late Sunday that it issued an arbitration notice to President Laurentino Cortizo's administration. Panama extended First Quantum's mining license last month, before reacting to protests by proposing to put the mine's future to a popular vote. The referendum proposal and a push for congress to repeal the contract were subsequently shelved as the government waits to see if the Supreme Court will kill the agreement instead.

The dispute has called into question the very future of the US$10 billion Cobre Panama mine. Last week, the company halted commercial production as a port blockade chokes key supplies to an operation that accounts for more than 1 per cent of global copper supply. 

“First Quantum remains committed to overcoming the current operational challenges at Cobre Panama through constructive and transparent dialogue,” it said in a statement. The company trusts in its “robust legal position” and aims to find solutions in line with stakeholder interests and with the law.  

Still, the challenge facing the company in Panama was on display early Sunday when a group of protesters attacked workers leaving the mine, injuring eight, a union leader said.

First Quantum has lost about half its market value since Cortizo turned against the agreement in late October. The Supreme Court could issue a ruling anytime.


Panama copper miners attacked by protesters, union boss says

Bloomberg News | November 26, 2023 | 

Protesters attacking mine workers in Panama. 
(Image by the Utramipa union, Instagram.)

Protesters attacked workers leaving the Cobre Panama mine early Sunday in an incident that left about eight people injured, a union leader said.


A group of protesters in a pickup truck threw stones at buses carrying staff from the First Quantum-operated mine, Michael Camacho, a leader of the Utramipa union, said by telephone.


After one bus was forced to stop, the passengers fled as protesters detained the driver, Camacho said. He said he was unaware of the extent of the injuries suffered by workers.

The union has called for protection of members as demonstrators pushing for the mine’s closure block key supplies from reaching it, which has forced the company to wind down operations.

Panama’s Supreme Court is considering cases filed against the mine, alleging the operating contract is unconstitutional.

(By James Attwood)

First Quantum plans maintenance for Panama copper mine amid protests

Reuters | November 22, 2023 | 

Cobre Panamá operation. (Image by Minera Panama.)

Canada’s First Quantum Minerals will carry out maintenance at its Panama mine from Nov. 23 due to coal supplies being blocked by protestors opposing the government’s contract with one of the world’s biggest and newest copper mines, two sources familiar with the discussions said on Monday.


This move would effectively suspend production at the Cobre Panama mine until coal supplies resume as the mine cannot operate without power, one of the sources said. The sources declined to be identified as the information is not public.

Copper prices hit a two-month high while the company’s stock fell as much as 5.7% after Reuters reported the mine suspension. The stock ended down 3.5%, while the benchmark Canada index rose 0.4%.

Protests have escalated since the government and First Quantum signed a new contract on Oct. 20 for the Cobre Panama concession, which contributes 1% to global copper production and 5% to Panama’s gross domestic product.

A ship with supplies for the mine was unable to dock as local boats blocked off access to the key port, the company said on Friday.

An FQM spokesman on Monday declined to comment specifically on the Nov. 23 suspension.

“In terms of production we are talking about a temporary halt because of the illegal blockade. As soon as the port reopens, we will be able to ramp production back up quickly,” the company said in a statement to Reuters.

Earlier on Monday, First Quantum said it had further ramped down operations at Cobre Panama to one remaining ore processing train, adding that it expects to run out of supplies for the on-site power plant during the week commencing Nov. 20.

“The focus will be to maintain the tailings pond 24/7,” one of the sources said about the maintenance.

Tailings ponds are created to store waste generated from mining, which requires proper maintenance.

Leonardo DiCaprio backs Panamanians’ protests against First Quantum’s operation

Panama’s top court will hear the legality of the contract awarded to First Quantum from Nov. 24, the company said in the statement.

The contract has faced numerous legal challenges due to protests that claim it favors the miner too much and allege corrupt practices in its approval. Such protests have escalated into an anti-government movement, as well as demonstrations against the environmental impact of the giant operation.

Last weekend, the protests against the mine received an endorsement from Hollywood actor Leonardo Di Caprio who shared a video from an environmental group that called for the Supreme Court to cancel the contract given to First Quantum.

Cobre Panama produced 112,734 tonnes of copper in the third quarter, according to First Quantum’s financial statements. It contributed $930 million to the overall third quarter revenue of $2.02 billion.

($1 = 1.3718 Canadian dollars)

(By Divya Rajagopal and Julian Luk; Editing by Denny Thomas, Chizu Nomiyama and Marguerita Choy)