It’s official – the Panama government has thrown a wrench into the gears of progress by ordering First Quantum to cease all copper operations. The Supreme Court of Panama’s ruling last month declared the company’s contract to operate the mine unconstitutional, following widespread protests. This comes as a devastating blow to Cobre Panama, which has been in production since 2019, having contributed a whopping 112,734 tonnes of copper in the third quarter of 2023, bolstering First Quantum’s overall third-quarter revenue to a staggering $2.02 billion.

A crisis is looming as the mine accounts for about 5% of Panama’s gross domestic product and a colossal 75% of its export of goods. The ripple effect of this decision will be felt far and wide, with Cobre Panama now seeking government authorization to lay off over 4,000 of its employees. They had previously suspended the contracts of 7,000 staff at the mine last month.

In a move to protect their rights under the concession agreement with the Panamanian government and the Canada-Panama free trade agreement, First Quantum has initiated international arbitration procedures in response to this disastrous turn of events. The ramifications of this reckless government intervention are bound to be far-reaching and economically damaging to all parties involved.

(Based on reports from Reuters)