Clock is ticking for First Quantum to halt Panama mine: minister By Reuters

By Valentin Hilario

(Reuters) – The 10-day deadline set by the Panamanian government last month for Canadian miner First Quantum (NASDAQ:) to offer a plan to close its mine amid a contentious contract dispute has not yet started, the Wednesday the country’s trade minister. .

The order to pause operations at the huge Cobre Panamá mine stems from a dispute that began in late 2021, after a Supreme Court ruling was made official that declared the previous contract unconstitutional. First Quantum, however, claims that the contact is still valid.

But the company has yet to make a $375 million payment to the government for its 2022 operations, even when it was operating without a contract, minister Federico Alfaro told Reuters.

The company has until this Friday to appeal the order, said Alfaro, who has been leading negotiations with First Quantum. His ministry will then review any appeals before the 10-day period formally begins, he added, but declined to provide a specific deadline.

The lucrative copper mine is an important asset for both sides of the dispute, as it is a major source of revenue for the company and accounts for around 3.5% of Panama’s economy.

The terms of the termination of the contract are among the sticking points to reach an agreement, the minister said. He said the company is asking the government to pay 85% of the fair market value of the mine in the event of completion.

In response to a request for comment, a First Quantum spokesperson pointed to comments by chief executive Tristan Pascall on Tuesday that did not detail any proposals by the company if its mine were completed.

Pascall, instead, stressed his willingness to accept, and even exceed, government demands on environmental and labor standards, as well as revenue in a new contract.

The government hopes to reach an agreement with the firm through regular meetings with First Quantum representatives, Alfaro said.

Both sides have been in arbitration since last month, and Alfaro expresses confidence as talks continue.

“We are in the best position to defend the interests of the State as has been done in other arbitration processes between private companies and the government,” he said. “We are ready.”

But the minister stressed that his preferred outcome is to reach an agreement before the end of the 90-day cooling off period, as stipulated in arbitration under a Canada-Panama trade pact.

Alfaro also said the government is prepared in case a new agreement with the miner is not reached, noting that lawyers and other international experts have been proactively hired “to look at all options.”