The court began deliberations on Friday and continued over the weekend. It announced a 12-hour break at the end of Monday’s session, delivering its verdict in in the early hours of Tuesday morning. The announcement was streamed live and watched by almost 24,000 people just in the first hour.
The court’s president Maria Eugenia Lopez said the vote against the contract had been unanimous, adding the ruling will now be published in the country’s official government newspaper.
The Supreme Court decision adds to a growing list of questions surrounding First Quantum’s Cobre Panama mine and its implications.
Lawyers contacted by MINING.COM agree that the most immediate effect would be a freeze of First Quantum’s operations in the country. This doesn’t mean much though, they said, as Cobre Panama has been halted since Friday.
A previous contract was ruled illegal once before, in 2017, but the mine continued to operate as usual while both parties negotiated a new deal. Unprecedented public anger against the project this time may force the government to adopt a stricter approach, local sources said.
Multi-layer earthquake
The ruling will have consequences for the copper market, as Cobre Panama mine accounts for about 1.5% of global production of the metal.
It will also affect the government’s coffers. The mine accounts for about 5% of its GDP and makes up 75% of Panama’s export of goods, supporting at least 40,000 jobs, directly and indirectly.
It is also likely to lead to international arbitration. First Quantum on Sunday sent Panamanian authorities a notification of intent to start arbitration proceedings. It later clarified the move was not the beginning of a legal procedure, but rather “a formality required by international treaties, with the purpose of opening a dialogue period of at least 90 days between the parties.”
“Pursuing international arbitration to recoup the massive financial loss of Cobre Panama would likely take years to resolve,” Orest Wowkodaw, analyst with Scotia Capital Inc. wrote in a note to clients. “However, we believe this course of action could ultimately bear fruit.”
Panama legislators had ratified the new contract between the executive and First Quantum, but reconsidered their decision after massive protests — the largest since a cost of living crisis last July — almost paralyzed the country.
Demonstrations against the contract have turned into an anti-government, end-to-all-mining movement. (Image: Screenshot of stock video.)
The land and sea ongoing demonstrations blocked the delivery of crucial supplies to the mine, forcing First Quantum to halt operations again this week. The protests have also affected farmers, schools, emergency services and a long list of businesses unable to keep up activities due to lack of staff and supplies, stranded along the many blocked routes in and out the capital city.
Over the weekend, demonstrators received endorsements from climate activist Greta Thunberg and Hollywood actor Leonardo Di Caprio, who shared a video calling for the “mega mine” to cease operations.
Cobre Panama, in production since 2019, generated 112,734 tonnes of copper in the third quarter of 2023, contributing $930 million to First Quantum’s overall third-quarter revenue of $2.02 billion.
Analysts at BMO Capital Markets believe that First Quantum is in a financial position that allows it to weather the storm in the short term.
“Under our base-case scenario which assumes Cobre Panama mine closure through 2023 year-end, First Quantum has sufficient liquidity,” BMO analyst Jackie Przybylowski wrote.
Challenges, she added, would arise if Cobre Panama remained halted for 80 days in 2024, as this would draw First Quantum’s cash down to zero at the bank’s current commodity and cash outflow assumptions.
A closure for the first half of the year, beyond the May 2024 presidential election, would result in a $267 million cash shortfall, Przybylowski said. This estimation doesn’t including cash reserves required for working capital.
“The primary goal of the government and courts today appears to be calming the protests,” Przybylowski wrote on Tuesday. “We are optimistic that this approach will be successful, and that protests around the Cobre Panama port will subside, with mining operations likely to resume relatively quickly if protests are lifted.”
Shares in First Quantum were down 3% to A$9.07 in Toronto on the news Tuesday. Uncertainty around its flagship mine in Panama had already wiped about C$10 billion off First Quantum’s market value, almost 50% of it, since President Laurentino Cortizo decided to call a referendum on the contract. The popular vote was cancelled and the final decision was ultimately placed in hands of the Supreme Court.
Amid protests and the failed referendum, Panama legislators passed a bill that originally sought to revoke First Quantum’s contract, but ended up banning all future mining concessions, including exploration, extraction and transportation of minerals, as well as contract renewals in Panama.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
