First Quantum shares stage partial rebound after Panama's congress backtracks

VANCOUVER — Shares of Vancouver-based mining company First Quantum bounced back 11 per cent Friday after losing nearly half their value this week, following a key reversal by Panamanian lawmakers.

Panama's National Assembly on Thursday scrapped a provision to revoke a controversial mining contract that had sparked nationwide protests over the past two weeks.

An indefinite moratorium on new mining activities passed a second vote in the chamber, but not before the article nixing the government's contract with First Quantum subsidiary Minera Panama was stripped out.

In response, shares of the Vancouver-based company had rallied by $1.74 to close at $17.45 on the Toronto Stock Exchange — after plunging from an Oct. 27 close of $27.96. First Quantum said production at its Cobre Panama mine remains uninterrupted, though protests and road blockades have caused supply shortages and disruptions at the site.

The moratorium bill now awaits a third and final debate in which no further changes can be made, then the final approval of President Laurentino Cortizo. The assembly went on recess earlier this week, so Cortizo was expected to call for another day of extraordinary session for the debate. Another bill that would put the Cobre Panama contract to a referendum also awaits debate.

Some lawyers welcomed Thursday's revision, warning that revoking the contract with a new bill could have left the government open to multimillion-dollar legal liabilities. Experts said those could be avoided if the country's Supreme Court rules the original contract was unconstitutional in any one of eight such cases brought against the deal so far.

Cortizo initially gave final approval on Oct. 20 to the 20-year contract for an open pit copper mine, which environmentalists argue imperils local drinking water and threatens to destroy more of the dense jungle surrounding it.

The contract includes the possibility of another 20-year extension for operation at the mine.

— With files from The Associated Press

This report by The Canadian Press was first published Nov. 3, 2023.

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The Canadian Press