(Bloomberg) -- First Quantum Minerals Ltd. is seeking compensation from Panama for a stockpile of semi-processed copper ore stranded at the company’s flagship mine as part of wider arbitration over the shuttered operations.
The material, worth between $225 million and $340 million at current copper prices, has sat idle for months at the giant mine while the Panamanian government determines whether the metal was mined before or after Cobre Panama was ordered to close last year. The Canadian mining company has warned that the matter must be resolved urgently since the stockpile can degrade in value and poses an environmental risk when left idle.
First Quantum argues that Panama must either let the 120,000 metric tons of the material leave the site or compensate the company based on the metal’s market value, according to people familiar with the matter. The claim is part of First Quantum’s two ongoing arbitration cases against Panama over shutting the $10 billion mine, said the people, who asked not to be named discussing confidential matters.
Compensation for the copper cache would be a welcome boost for First Quantum’s balance sheet after Panama ordered the closure of its mine last November following fierce public protests. The company is seeking at least $20 billion from Panama in two arbitration cases — one through the International Chamber of Commerce and another through the Canada-Panama Free Trade Agreement — filed after Cobre Panama’s closure.
Panama’s Commerce and Industry Ministry didn’t immediately provide a response to requests for comment. First Quantum declined to comment.
The Vancouver-based company had expected to be able to ship the copper material earlier this year. It’s now arguing it is entitled to damages to compensate for the time that the material has been barred from shipment, said one person familiar with the matter.
The ICC’s International Court of Arbitration case is the most advanced of the two proceedings with a final hearing scheduled for September 2025, First Quantum said in its July 24 earnings call with investors.
Canadian mining royalty firm Franco-Nevada Corp. and German equipment manufacturer Liebherr-International AG have also both said they’re pursuing separate arbitration claims related to Cobre Panama’s closure.
--With assistance from James Attwood and Michael McDonald.
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