Panama’s president said Tuesday that Canadian miner First Quantum’s lucrative copper mine, Cobre Panama, would be shut down, hours after the country’s Supreme Court declared its contract unconstitutional.
President Laurentino Cortizo said in a televised address on Tuesday evening that “the orderly and safe closure of the mine” would begin as soon as the Supreme Court’s ruling was formally published in the official gazette.
First Quantum said on Tuesday it had suspended commercial production at the mine and was putting it into care and maintenance.
The announcement Tuesday by the nine-justice court, after four days of deliberations, set off cheers among demonstrators waiting outside and waving Panamanian flags.
The contract by a subsidiary of TSX-listed and Vancouver-based First Quantum, signed in October, has sparked widespread protests across the country for several weeks.
“This is what we had been waiting for,” demonstrator Raisa Banfield said after what she called an agonizing wait. “The president has to suspend [mine] operations today.”
The dispute over the open-pit Cobre Panama mine has led to some of Panama’s most widespread protests in recent years, including a blockade of the mine’s power plant. Protesters also blocked parts of the Pan American highway, including a stretch near the border with Costa Rica. Just before the ruling was announced, they opened the roadway so that freight trucks could get through.
First Quantum’s local subsidiary, Minera Panama, said in a statement earlier this month that small boats had blocked its port in Colon province, preventing supplies from reaching the mine. Naval police reported that a ship carrying coal decided to turn back due to “hostility from a group of protesters who from their boats threw rocks and blunt homemade objects” before being dispersed.
The protesters, a broad coalition of Panamanians, fear the mine’s impact on nature and especially on the water supply in a biodiverse jungle on the Atlantic coast west of the capital
The deal had the company agreeing to hand over at least $375 million US annually to the government of Panama for the right to operate the mine for the next 20 years. It also has a clause to extend the deal for 20 more years beyond that.
The mining contract has sparked unprecedented widespread protests across Panama. (Walter Hurtado/Bloomberg)
The mine was temporarily closed last year when talks between the government and First Quantum broke down over payments the government wanted. The restart of the deal in October sparked widespread opposition.
Since protests began, the government nearly passed legislation that would have revoked the contract, but it backtracked in a debate in the National Assembly on Nov. 2. Protesters’ last hope was for Panama’s courts to declare the contract unconstitutional.
That happened on Tuesday with the court saying, “We have decided to unanimously declare unconstitutional the entire law 406 of October 20, 2023,” in a short statement signed by Supreme Court President Maria Eugenia Lopez.
While a setback for the company, the ruling did not strike down the contract itself, but merely the process with which it was signed, says Dalton Barretto, managing director of equity research metals and mining at Canaccord Genuity.
“It means that the process followed by the government to take the renegotiated contract and enshrine it into law did not follow constitutional process,” he said in an interview with CBC News
The mine has been idled due to blockades limiting the supply of goods in and out, and Barretto says the court ruling does not and could not change that one way or the other.
“The issue in terms of restarting is not the ruling; it is that the protesters are blockading all supply routes,” he said. “If tomorrow the protests run away and First Quantum can get a coal ship into their port, they could start up the mine immediately.”
The ruling is a setback for the company in that it extends the uncertainty over the project at least until next spring, when the results of an election in the country will likely mean a new round of negotiations and due process to get whatever deal gets signed into law.
“It hurts the company in the sense that the agreement will need to be put through the constitutional process by the next government, who will likely want to renegotiate some of the terms before they agree to do that,” he said.
Ultimately, however, he’s confident the company will prevail in one form or another. “The reality of the situation is that, likely a year from now, this mine will restart because it is too important to the Panamanian economy,” he said.
It makes up about five per cent of the country’s entire GDP and is the largest source of government revenue outside the Panama Canal.
“If it does not [restart] it will impact the country’s economy for the foreseeable future,” he said.
In a statement following the release of the court’s decision, First Quantum said it is committed making the project work for all sides.
“We want to affirm our unwavering commitment to regulatory compliance in all aspects of our operations within the country,” the company said in a statement. “We will comment further as additional details on the ruling are made public.”
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.
