U. S. copper futures overcame a few days of weakness on Friday to rise just about 2% to $4. 5680 a pound ahead of the elections in Panama on Sunday (yesterday).
But even before the first vote took place, Reuters pointed to a major negative point in the history of Canadian mining giant First Quantum and its former biggest asset, the Cobre Panama mine.
On Friday, Reuters reported that Panama had said it would save First Quantum from copper processing following the closure of the mine to which it lost rights last year.
Reuters reported that Panama’s Industry Minister Jorge Rivera made the comment while discussing what will happen to the massive mine that closed late last year, a move that required more than 350,000 to 400,000 tonnes of copper off global markets and helped push prices higher. It’s more than 4 US dollars per pound.
Comex’s costs have risen more than 17% since the start of the year due to a shortage of copper concentrates from the Cobre Panama mine and Anglo American-owned mines, which have reduced production in recent years.
In addition, BHP recalled thousands of tonnes of concentrates from the market when it acquired OZ Minerals’ two copper-gold mines in South Australia last year. BHP has recently processed concentrates from OZ Minerals’ Prominent Hill and Carapateena mines near Olympic. Dam Center.
There are reportedly more than 121,000 tons of concentrates at Cobre Panama; Its ownership is dubious and its current market price is estimated to be around $200 million. Reuters said mining corporations around the world have a tendency to continue mine closure processes because they use those profits. to finance closures.
Closing costs would also amount to more than $800 million.
The resolution to decommission Canada’s First Quantum mine, which accounted for about 40% of its profits last year, came amid nationwide protests that prompted the government to ban all steel mining activities.
Panama last year ordered the closure of the Cobre Panama mine, which accounted for about 1 percent of global copper production, following a Supreme Court ruling that its contract was unconstitutional.
“There are two opportunities to fund the closing process. One is for the company to pay for it, if it continues to deal with the shutdown, and the other is for the government to cover it. Where would the budget come from? That’s the component of the discussions we’re having,” Rivera Staff told Reuters.
Traders and investors are watching the election results to see if a new government can reinstate mining, but Rivera Staff told Reuters it could take months or even years to see a change in Panamanians’ existing strong opposition to mining.
Panama and the Canadian mining corporation are working together to expand a plan – to be made public in the next two weeks – to put the mine in “care and maintenance mode” while the main points of the definitive closure are resolved.
Current plans call for First Quantum to manage the closure process, but the country could have only one option if larger situations are offered, the minister said, adding that the closure is expected to take at least eight years.
Another sticking point between Panama and First Quantum is ownership of the 121,000 tons of copper stored at the mine.
First Quantum said last week it believes it can mine it after the election, but Rivera Staff said the government still doesn’t know who owns it.
Panama is investigating whether the copper ore processed into concentrates was produced before or after the court ruling that invalidated the contract.
First Quantum has opened publicity arbitration proceedings against Panama over the voided contract, but four arbitrations, focused on investments, are in their early stages.
These will last for several years.
…
Gold prices rose on Friday but lost 1. 5% on the week, settling on the Comex at $2,308. 60.
Comex copper, however, rose 1. 9% on Friday to end at $4. 5680 a pound, leaving red steel up more than 17% year-to-date.
Iron ore in Singapore was unchanged, finally down 43 cents on the week at $117. 05 on Friday.
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