First Quantum and Panama fail to reach agreement
Canadian mining company First Quantum Minerals and the government of Panama have failed to reach an agreement governing the operation of the Cobre Panama mine.
Commerce and Industries Minister Frederico Alfaro Boyd said in a statement that the President would provide an update about efforts to finalise a contract with First Quantum and its local subsidiary, Minera Panama SA (MPSA), later on Thursday.
The parties had until December 14 to sign a contract, having previously reached an agreement under which First Quantum committed to pay at least $375-million a year in benefits.
In a statement, First Quantum said that the MPSA economic package would make the Cobre Panama mine one of the highest payers of royalties and taxes among the big copper producing mines in the Americas.
The company said the economic package agreed on almost all clauses and incorporated the agreements in principle made earlier this year, but that necessary legal protections on termination, stability and transition arrangements could not be agreed upon.
Alfaro Boyd, however, said that MPSA had sent a new proposal early in the morning on Thursday, which “fundamentally changed economic aspects, such as a modification to the previously agreed royalty regime”.
“This action is regrettable,” the Minister said.
Alfaro Boyd also accused the company of engaging in protracted discussions and making unreasonable demands.
First Quantum CEO Tristan Pascall said First Quantum’s goal remained to find a mutually acceptable resolution, which the company believed was in the best interest of all parties.
He added that First Quantum and its predecessor had invested at least $10-billion to build one of the world’s largest, safest and most advanced copper mines. “It is the largest private investment in the history of Panamá and a significant contributor to the Panamanian economy and important social programmes.”
First Quantum said MPSA remained available and open to further constructive dialogue.
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