The Canadian mining company that controls a massive copper mine in Panama says it has no plans to alter its operations despite widespread local protests against the firm’s mining contract that have escalated and turned deadly.

Last month, Vancouver-based First Quantum Minerals Ltd. was awarded a contract to continue operations at a massive open-pit copper mine in Panama. The terms of that deal, which give the company the right to mine the site for at least the next two decades in exchange for $375 million US a year to the government, have become a flashpoint for local groups, some of whom oppose the mine plan for financial and environmental reasons.

That opposition has escalated into broader anti-government protests that officials say are costing Panama $80 million US a day.

The mine faces legal and constitutional challenges from the country’s top court, and citizens may get a chance to vote on the contract extension in a referendum next month. But last week, First Quantum said it was “confident with respect to its legal position” and reiterated the economic benefits of the mine. 

Besides the Panama Canal, the sprawling Cobre Panama copper mine is the second-largest contributor to the country’s economy, responsible for about five per cent of GDP. One out of every 50 people in Panama are directly or indirectly employed by the mine, First Quantum says. 

Despite that, opposition to the mining contract has prompted widespread protests across the country, which is grappling with high inflation and unemployment. The protests “were originally organized by environmental groups opposing mining activity,” said Nestor Rodriguez, a mining analyst with Barclays investment bank. “But other groups like labour unions … teachers, Indigenous groups, students and the civil sector joined them as days passed.”

Schools across the country have been closed for more than a week, and protesters have taken to the streets, disrupting roads, ports and other major infrastructure.

“Production at the Cobre Panama mine remains uninterrupted at this time, however, like many businesses across Panama, protests, including blockades of key roads, have caused disruptions on site as well as shortages in certain supplies,” the company said last week.

Those protests took a deadly turn this week when two protesters participating in a blockade of a major highway were shot dead.

Photos and videos of the shocking incident are circulating online, and the country’s law enforcement agency said on X that a man has been arrested and charged in relation to the crimes.

That deadly escalation has so far not changed the mine’s status.

“Nothing additional to add at this time,” a spokesperson for First Quantum told CBC News in a statement, when asked if it was rethinking its plans following the shootings. “The violence which you refer to … was not near nor connected to the Cobre Panama mine,” the company said, noting that it was on a highway in a completely different part of the country.

The company may be proceeding with business as usual, assuming the contract to mine the site will prevail, but investors are unconvinced that things are going to play out as planned.

First Quantum shares have lost more than 40 per cent of their value on the TSX since the saga began.

Of the 20 analysts who cover the stock, 15 have a “hold” rating on the shares, which is a recommendation neither to buy it nor to sell it. And the main reason why is the uncertainty.

“There still remains a high degree of uncertainty about the future … and whether or not the terms of the contract will be renegotiated,” TD Bank analyst Greg Barnes said in a note to clients.

CIBC analyst Bryce Adams said the “situation remains very fluid and unpredictable.” He expects shares to remain under pressure for a while because the dispute “could extend through to national elections scheduled for May 2024.”