Bloomberg — Panamanian officials and the operator of a giant copper mine are back at the negotiating table after a hiatus of more than a week, with both sides saying they’re keen to reach a deal on tax payments and avoid a shutdown of the facility.
Vancouver-based First Quantum Minerals Ltd. said Wednesday that talks resumed Dec. 26 and that it’s committed to finding a mutually beneficial accord as soon as possible. The Commerce Ministry said Tuesday it’s “open to holding a frank, respectful dialog that can lead to a resolution of this issue.”
The positive tone struck by both sides contrasts with events in recent weeks, when the collapse of earlier negotiations prompted Panama to initiate a halt to production at the mine. That in turn spurred First Quantum to take steps toward international arbitration.
An 11th-hour deal would be a boon for both sides, as well as relieve pressure on a fairly tight global copper market. The Cobre Panama mine, which cost about $10 billion to build, is First Quantum’s biggest asset and an economic engine for the Central American nation. It can churn out as much as 300,000 metric tons a year, or about 1.5% of worldwide copper output.
For now, the open-pit mine is running normally since Panama gave the company 10 business days to come up with a plan for putting it on care and maintenance. Some analysts regard the order as a negotiating tactic, as the government seeks much more favorable terms than the current mining concession offers. Still, the authorities have vowed to press on with the stoppage process.
In 2017, First Quantum boosted its interest in the Panamanian company that holds the concession to 90%. But Panama’s Supreme Court deemed the law governing the concession to be unconstitutional. One of the sticking points in recent talks has been a proposed minimum $375 million annual contribution to be paid by First Quantum to the government, with the company pushing for protections in the event of much lower metal prices.
--With assistance from Yvonne Yue Li and Michael McDonald.
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