- In an update on balance sheet initiatives, First Quantum Minerals (TSX:FM) is making steep cuts and is putting its smaller mines up for sale
- This is because of its ongoing dispute with the government of Panama and workers at its US$10 billion Cobre copper operation in the small transcontinental country, where it was ordered to halt operations
- The Toronto-based miner plans to conserve capital, suspend its dividend, cut jobs and lower costs to strengthen its financial position
- First Quantum Minerals stock opened at C$13.31 per share
In an update on balance sheet initiatives, First Quantum Minerals (TSX:FM) is making steep cuts and is putting its smaller mines up for sale.
This is because of its ongoing dispute with the government of Panama and workers at its US$10 billion Cobre copper operation in the small transcontinental country, where it was ordered to halt operations.
The Toronto-based miner stated in a news release on preliminary production and guidance to 2026 that it plans to conserve capital, suspend its dividend, cut jobs and lower costs to strengthen its financial position. The initiatives include cutting capital spending by US$400 million in 2023 to a range of US$1.2 billion to US$1.4 billion. This comes from slowed spending on Cobre Panama, one of the world’s largest open-pit copper mines.
Without Cobre operating, the company admitted that it expects copper output to fall by nearly half from last year. A total of 708,000 metric tons of copper were produced by First Quantum in 2023, and it expects to produce 370,000 tons to 420,000 tons in 2024. First Quantum’s Q4 2023 copper production dropped 22 per cent to 160,000 metric tons.
The company stated it held discussions with Panama’s Ministry of Commerce earlier this month related to the mine’s current status of suspension, which it described as a phase of “preservation and safe management.” The costs to maintain the site are estimated at US$15 million to US$20 million per month.
Depending on environmental stewardship programs, First Quantum stated it would reduce its workforce to below 1,000 workers from about 1,400 workers at the Panama mine.
Other projects around the globe have been causing headaches for First Quantum, which has had to address higher costs of operating its Zambian mines while it cuts production at its Australian nickel mine because of a “significant” downturn in its prices in 2023. This resulted in a 30 per cent reduction in the operation’s workforce.
First Quantum is a global copper producer in the form of concentrate, cathode and anode, with additional inventories of nickel, gold and cobalt. The company has been active in Panama for the past decade.
First Quantum Minerals stock opened at C$13.31 per share and moved nearly 2 per cent higher. However, First Quantum stock has lost nearly 55 per cent year-over-year, though is more than 5.5 per cent higher than it was in 2018.
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