Cobre Panama project comes to an end

As the construction phase of the large-scale Cobre Panama project of First Quantum comes to an end, the Toronto-listed company is well positioned to meet its “own, very high expectations for the year and years to come”, Cobre Panama GM Tristan Pascall said recently.

Following a faster ramp-up, the commercial production of First Quantum’s newest copper mine has been brought forward to the end of the current quarter.

The accelerated ramp-up, combined with other higher costs associated with construction and commissioning, has increased the Cobre Panama’s expected capital estimate by six percent to $6.7-billion,  the mining company reported in its second-quarter results announcement.

In precommercial mode, Cobre Panama has already made a meaningful contribution to First Quantum’s production, with copper output of 10 550 tonnes and gold production of 59 647 oz in the second quarter. The mine is forecast to produce 140 000 t to 175 000 t this year.

During the second quarter, First Quantum’s copper production increased by 12 percent year-on-year to a new record of 168 399 t.

In Zambia, the Sentinel mine’s production was comparable with that of the second quarter last year, producing 54 977 t and the Kansanshi mine’s output was 58 634 t. Guel Moghrein, in Mauritania, produced 7 750 t of copper, which is a 34 percent year-on-year increase.

The second-quarter cost of production was reported at $1.77/lb of all-in sustaining costs, $1.32/lb cash costs and $2.17/lb total costs.

The group netted sales revenue of $939-million for the quarter, compared with the year-earlier period’s $1.05-billion, reflecting lower sales volumes, excluding sales from Cobre Panama, and a lower realized copper price. Net earnings attributable to shareholders reduced to $78-million, from $135-million.

Meanwhile, First Quantum reported that subsidiary Kalumbila Minerals had last week reached a settlement with the Zambia Revenue Authority (ZRA), with respect to the assessment claim on duties.

“The amount agreed was in line with the company’s previously disclosed expectations and no further action is required,” the firm said.

ZRA in March last year slapped Kalumbila Minerals with a 76.5-billion kwacha tax bill ($7.6-billion) for unpaid duties on imported mining equipment, an assessment that First Quantum refuted.

In Spain, the Las Cruces operation had received regulatory approvals to resume mining following a temporary suspension earlier this year owing to a landslide that occurred in January. Normal mining activities resumed on July 11.


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