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.”
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
