PANAMA CITY, (Reuters) – Panama’s government ordered Canada’s First Quantum Minerals FM.TO yesterday to pause operations at its flagship copper mine in the country after missing a deadline to finalize a deal that would have increased payments to the government from the mine.
The government had given Minera Panama, which is majority-owned by First Quantum Minerals, until Wednesday to sign an agreement reached in January to pay $375 million a year to the government from its Cobre Panama mine.
Panama’s government ordered the commerce and industry ministry to suspend Minera Panama’s operations at the mine after a midnight deadline was missed.
Months of talks between the miner and government continued until early morning Thursday, the commerce and industry ministry said. It added that the miner then sent a new proposal that “fundamentally” changed the deal’s economics.
The Toronto-based miner said earlier Thursday the deal was not finalized because “necessary legal protections on termination, stability and transition arrangements could not be agreed.”
The company earlier said it was open to further dialogue but did not immediately respond to the announcement that its operations would be suspended.
Authorities and the company began negotiating a new concession contract late last year after Panama’s President Laurentino Cortizo promised to extract better benefits for the country from the copper mine.
First Quantum Mineral’s $6 billion investment in the open-pitmine, where operations began in 2019, is considered the largest private investment in the Central American country and accounts for roughly 3.5% of Panama’s gross domestic product.
