PANAMA CITY — Canada-based miner First Quantum Minerals Ltd and its subsidiary Minera Panama started arbitration processes against Panama, the country’s ministry of commerce and industry said on Saturday, as the two sides have been locked in a disagreement over payments and mine operations.
Panama’s government on Monday ordered First Quantum to pause operations at its flagship Cobre Panama copper mine after the company missed a deadline to finalize a deal that would have increased payments to the government by at least $375 million.
Financial Post Top Stories
Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300
Despite having agreed to meet with the government, the company decided on Friday to “advance efforts” by going ahead with two arbitration processes, the ministry said in a statement, without giving further details.
An official from the country’s economy and finance ministry told Reuters on Friday that Panama was looking for a “fair” deal in which the company complies with the obligations its large operations demand.
First Quantum did not immediately respond to a request for comment.
The company initiated one of the arbitration processes under a 1997 contract, which regulates its operations, and the other under the free trade agreement between Canada and Panama, the government added.
The government has been and is going to keep working with law firms Squire Patton Boggs and Allen & Overy to solve the disputes, a spokesperson for Panama’s commerce and industry ministry said. Both firms did not immediately respond to a request for comment.
Panama was asking for a maintenance plan for the company, which is considered the largest private investment in the Central American country and accounts for roughly 3.5% of Panama’s gross domestic product.
“The resolution … that orders Minera Panama to accomplish a care and maintenance plan for the Panama copper mine remains in force, and the government will monitor its full compliance,” the ministry said in a statement. (Reporting by Valentine Hilaire; Writing by Carolina Pulice; Editing by Josie Kao)