Canadian Company Blames Panama For Copper Mine Closure

A Canadian company has claimed the Panamanian government broke off talks with it, leading to the closure of a giant copper mine, Canada Today reported.

Photo Insert: First Quantum said in a statement Friday it agreed to those payments and “came very close to an agreement to secure the long-term future of the Cobre Panamá mine before the government halted talks.”

Canada’s First Quantum Minerals Ltd. announced in a statement that it had negotiated with the Panamanian government, which would demand greatly increased royalties of $375 million per year from the company.

Analysts say the dispute threatens to have a huge economic impact in Panama, where the Cobre Panamá mine accounts for 3% of Panama’s gross domestic product (GDP), and poses a major challenge to the government, which has yet to manage the open pit mine.

First Quantum said in a statement Friday it agreed to those payments and “came very close to an agreement to secure the long-term future of the Cobre Panamá mine before the government halted talks.”

The company said it wanted a safeguard in case metal prices or the mine’s profitability fell, presumably to reduce royalties in that case. Panama announced Thursday that it had ordered the subsidiary of Frist Quantum to cease operations at the mine, the largest private investment in Panamanian history.

The company said it has invested around $10 billion in the project since 1997. It will not be easy to just shut down such a large operation with 40,000 employees and pits to be monitored and maintained.

Environmental law expert Rodrigo Noriega said Panama may need to take several steps. There are “various options, you could allow the mine to continue operations while talks continue, which would be a benevolent plan, or you could seek a third party to manage it while the case with the mining company is resolved.” Noriega said.

President Laurentino Cortizo’s cabinet voted Thursday to halt operations at the mine, directing the Department of Labor to take measures that would guarantee employment and job security for workers.

Panama accused Minera Panama of failing to meet commitments agreed in January for a new contract that was “reasonable and satisfactory” to the Panamanian people.

Minera Panama had agreed in a letter Jan. 17 to a deal that included a minimum annual payment of $375 million. Despite negotiations, the company did not sign the new contract by the December 14 deadline, Victoria Fetcher also reported for the Associated Press (AP).

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