The open pit copper mine Cobre Panama, run by Panamanian Mining company Minera Panama, a subsidiary of Canada's First Quantum Minerals Ltd., stands in Donoso, Panama, Dec. 6, 2022. First Quantum Minerals Ltd. says it is back in discussions with the government of Panama over a benefits sharing agreement as it looks to avoid a shutdown of its Cobre Panama mine. THE CANADIAN PRESS/AP-Abraham Teran
Republished December 28, 2022 - 9:18 AM
Original Publication Date December 28, 2022 - 6:06 AM
TORONTO - First Quantum Minerals Ltd. said it is back in discussions with the government of Panama over a benefits sharing agreement as it looks to avoid a shutdown of its Cobre Panamá mine.
Toronto-based First Quantum said on Dec. 16 that the government had cut off talks and ordered the mine closed, but now says discussions on increasing payouts from the mine restarted on Monday.
"We appreciate the Government of Panamá’s constructive engagement this week," said chief executive Tristan Pascall in a news release Wednesday.
First Quantum said that for now the mine is operating as normal, but that it received formal notification on Dec. 21 that it needs to submit a plan within 10 working days on how it plans to wind down operations.
The company said it continues to do everything possible to support workers at the mine and to protect its investment, which totals more than US$10 billion over more than two decades in the country.
The benefits sharing agreement proposed by the company would provide for payments of US$375 million a year in tax and royalty revenues, but First Quantum is also pushing to secure the right to reduce the amount if metal prices or profitability drop significantly.
The current contract, which the government is looking to renegotiate, was renewed in 2017 and runs until 2037, while the mine began producing copper in 2019.
First Quantum said talks are ongoing and it remains committed to seeking a mutually beneficial agreement as soon as possible, but that it has also started preliminary legal actions including potential international arbitration under the Canada-Panamá Free Trade Agreement.
"The preferred option for both sides is to achieve a balanced agreement that will benefit all parties for many years to come," said Pascall.
This report by The Canadian Press was first published Dec. 28, 2022.
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