Panama election unlikely to shift outlook for First Quantum’s copper mine

Prospects are poor for First Quantum Minerals to recover its canceled concession for a lucrative copper mine after presidential elections in May, a Reuters review of the campaigns’ proposals and interviews with protest leaders show.

Protests against First Quantum’s concession demanding greater environmental guarantees and transparency in negotiations made authorities not only annul its contract to operate one of the world’s largest and newest copper mines but ban all new metal mining permits last year.

Metal traders and investors are closely watching the election outcome to see if a new president could help revive mining in Panama.

Eight candidates are set to appear on the May 5 ballot, with polls showing a tight race. Among the five frontrunners, three have vowed to continue with the plans to close the Cobre Panama mine, one has pledged a referendum on the matter and another has not formally indicated his intentions.

The Canadian miner lost nearly half of its market value after it was stripped of its contract and in March global rating agency Fitch downgraded Panama’s sovereign bonds to speculative grade, citing fiscal and governance challenges aggravated by the mine’s closure.

Asked about its expectations for the mine after the vote, a spokesperson for First Quantum said only: “As in any jurisdiction we operate in, we look forward to seeing the process of democracy deliver the candidate of Panama’s choice in a fair, transparent and peaceful election.”