Panama, Canadian Mining Company to Resume Negotiations Regarding Continued Operation of Open-Pit Copper Mine

Canadian mining company First Quantum Minerals is reportedly in the middle of talks and negotiations with the government of Panama over the rights of operations over a copper mine in the country that has continued to be central in their dispute.

Tristan Pascall, First Quantum Minerals’ chief executive, reportedly flew into the country over Christmas to attend the discussions, which were ended by the government on Dec.16, and the mine shut down after talks had disintegrated at the time, according to the Financial Post.

The government of Panama has been in dispute with the company over the potential increase of the company’s annual tax payments and royalties to the country, as well as potentially strengthening the workers’ legal protections in regard to contract duration and terminations, Reuters reported.

The main contention point of the two parties is the annual tax payments, which Panama wants to increase to $375 million, which First Quantum was reportedly willing to accept under the condition that they can reduce the amount that they need to pay if the profitability of the mine is reduced.

First Quantum had last signed a renewal of their contract in 2017, which gave them the rights to the output of the mine up until 2037.

Despite the dispute culminating in the closure of the mine on Dec. 16, the mine was reopened on Dec. 21 with the caveat that the company submits a plan on winding down operations if the negotiations are not successful.

The mine has been an important part of Panama’s economy, reportedly accounting for 3.5% of the country’s GDP. First Quantum has also invested over $10 billion in the open-pit mine for over two decades, and the company said that it plans to protect and continue its investment in the country.

“We appreciate the Government of Panama’s constructive engagement this week,” Pascall said on Wednesday. “The preferred option for both sides is to achieve a balanced agreement that will benefit all parties for many years to come.”