Mining giant claims deal with Panama ‘close’
Canadian mining giant First Quantum Minerals said on Tuesday it is close to an agreement with Panama to avert the closure of Central America’s largest copper mine.
But the government of Panama denied that the two sides were on the verge of reaching a deal, saying key issues remained unresolved.
The Cobre Panama mine is considered the largest private investment in Panama’s history, making up four per cent of its gross domestic product (GDP) and accounting for 75 per cent of its export revenues.
Panama had given the company until the middle of last month to agree to a new contract under which the amount it pays annually for its mining concession would rise by a factor of 10, to at least US$375 million.
“I don’t think we are very far away,” said First Quantum Minerals chief executive officer Tristan Pascall during an analyst call about the ongoing talks with the Panamanian government.
The company added in a statement that it was willing to accept and in some cases surpass Panama’s demands on money, environmental protection and workplace standards.
But the Panamanian government later said Pascall’s remarks “do not reflect the reality of the situation" because the two sides “disagree on certain fundamental issues”.
It said the company had made proposals that would boost its profits when copper prices were high and protect itself when prices were low.
Negotiations on a new contract at the huge open pit mine have been underway for more than a year but have deadlocked on the issue of how much the company would pay to Panama.
On Dec 15, Panamanian President Laurentino Cortizo increased pressure on the company by ordering the closure of the mine, except for maintenance work.