PANAMA CITY, Feb 23 (Reuters) – First Quantum Minerals Ltd (FM.TO) suspended ore processing operations at a key Panamanian copper mine, the Canadian miner said on Thursday, in a move the Central American country’s government dismissed as unhelpful pressure tactics.
The company and Panama’s government have been locked in a prolonged contract dispute with tax and royalties at the heart of the stalemate.
First Quantum’s local unit, Minera Panama, will begin a partial demobilization of its workforce of over 8,000 employees and contractors, and expects the impact to increase significantly in the coming weeks if concentrate shipments do not resume, the company said.
Panama’s trade and industry ministry brushed off the miner’s announcement as “pressure tactics” that will not help ongoing negotiations, in a statement released later on Thursday.
The mine’s local union called for fresh protests at a nearby provincial capital a day earlier, adding yet another layer to the conflict.
RBC Capital Markets analyst Sam Crittenden wrote in a research note that First Quantum stock will likely shed value after the company’s decision to temporarily stop processing.
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Shares of First Quantum traded down 0.85% on Thursday in midday trading on Toronto’s main stock exchange.
Crittenden added that if a concentrate export ban enacted late last month drags on, a full demobilization of the mine’s workforce would negatively impact operations for at least a couple months.
Analysts with brokerage Jefferies added in a separate investor note that despite the latest escalation, they still expect a resolution.
On Wednesday, the Cobre Panama mine’s union called for a protests over the halt to operations, arguing it will harm workers.
Some workers asked the company and government to reach a deal to resume operations, according to union social media posts.
First Quantum denies claims that the concentrate export ban ordered by port authorities was needed because its scale was improperly calibrated, adding in its Thursday statement it could resume operations and shipments “within hours” if the ban was lifted.
Reporting by Ankit Kumar and Valentine Hilaire; Additional reporting by Milagro Vallecillos; Editing by Sriraj Kalluvila, Shounak Dasgupta and Diane Craft