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Panama reviews “all options” if agreement with Canadian firm operating copper mine fails

The Panamanian government informed Thursday that it is contemplating “all options” available in case the ongoing negotiations for the Canadian company First Quantum Minerals to continue operating the largest copper mine in Central America fail, including the concession to another firm.

“Yes, we have analyzed all options, all those options are on the table,” stated the Minister of Commerce and Industries, Federico Alfaro, in a meeting with foreign press correspondents.

“It is part of the government’s strategy to evaluate all possible options in case the [Canadian] company does not sign a contract,” the official added, without giving details, when asked if he contemplated the possibility of handing the concession to another company.

On December 15, Panama’s president, Laurentino Cortizo, ordered the stoppage of operations in the country by First Quantum Minerals, which exploits the largest mine in Central America in the Panamanian Caribbean.

According to the government, Minera Panama, the subsidiary of the Canadian group, has not complied with the commitments agreed a year ago for the new concession contract which would raise the amount of royalties to 375 million dollars per year, 10 times more than in the previous agreement.

The general director of the Canadian group, Tristan Pascall, said on Tuesday in Canada that the company and the Panamanian government were “close” to reaching an agreement, which was denied the same day by the Cortizo administration, which expects to sign a 20-year concession, with the possibility of extension for another 20 years.

There are still “important and significant gaps in some economic and legal issues”, said Minister Alfaro on Thursday.

Panama fears that in the event of a decrease in the price of copper, the mining company will not comply with the royalties of 375 million dollars per year.  

This open-pit mine produces since February 2019 some 300,000 tons of copper concentrate per year, representing 75% of the country’s exports and 4% of the Panamanian GDP.

The deposit, discovered in 1968, is located on the Caribbean coast, 240 km by road from the capital and one hour by helicopter. 

First Quantum, which says it has invested more than US$10 billion in Panama and employs more than 7,000 workers, began having difficulties in this country after the Panamanian Supreme Court declared the mine’s concession contract unconstitutional in 2017.

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