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First Quantum submits copper mine preservation plan to Panama government

Credit: REUTERS/TARINA RODRIGUEZ

By Elida Moreno

PANAMA CITY, Jan 17 (Reuters) - Canadian miner First Quantum has delivered an initial preservation and management plan to the Panamanian trade ministry regarding its lucrative copper mine in the country, the miner's Panamanian unit said on Wednesday.

The plan takes into account the "abrupt and unusual" cessation of operations before the end of the Cobre Panama mine's useful life, it said in a statement, noting that the plan will be updated as conditions evolve.

The miner's Toronto-listed shares slid after the announcement, falling 4.2% in morning trading.

First Quantum is dealing with the fallout of the Panamanian government's decision in December to halt production at the mine following public protests, which accounted for more than 40% of the company's annual revenue and is considered one of the biggest and newest copper mines in the world.

The month before, the country's Supreme Court ruled that First Quantum's contract to operate in Panama was unconstitutional.

Since the blow to its revenue, First Quantum has been looking at ways to shore up its finances. The company has said that it is exploring sales of smaller mines and looking to bring strategic equity partners for its large mines.

First Quantum on Wednesday said the preservation plan at the mine in Panama entailed costs estimated at "tens of millions of dollars a month."

It added that it would retain around 1,400 employees at the site to carry out the preservation plan, but that "later there would inevitably be other reductions in the number of workers."

Cobre Panama had previously requested to lay off thousands of workers at the site and on Tuesday offered voluntary retirement to more than 1,500 staff.

First Quantum said that the plan required "free and uninterrupted transit" by road and at a nearby port to deliver supplies to the site. Access to the mine has been strangled by protests and blockades in recent months.

(Reporting by Elida Moreno; Additional reporting by Mrinalika Roy; Writing by Kylie Madry; Editing by Brendan O'Boyle and Mark Porter)

((Kylie.Madry@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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