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First Quantum Minerals (OTCPK:FQVLF) -9.2% in trading on Wednesday after the Panamanian government said it Copper mine closed Cobre Panamaending for now hopes that the company can reach a new agreement to maintain its operations after a Supreme Court ruling against it..
The president of Panama, Laurentino Cortizo, said on social networks that once the decision was published in the official gazette, he instructed the beginning of an orderly and safe closure of the mine.
First Quantum (OTCPK:FQVLF) said it suspended commercial production at Cobre Panamá, which accounts for about half of the company’s annual production, and is placing the mine on care and maintenance.
The ruling will have consequences for the copper market, as Cobre Panama accounts for 1% of global copper production, and analysts say reduced copper supply from Panama and Peru could wipe out the global surplus expected in 2024.
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The mine is also an important business for Panama, contributing ~5% of the country’s GDP, and JP Morgan has warned that the move increases the likelihood of Panama losing its investment grade rating.
