Panama & First Quantum Mull Fresh Talks On Copper Mine Next Week
Panama’s government and First Quantum Minerals Ltd. are looking at the possibility of holding talks next week in a final effort to seek a tax agreement for a giant copper mine, according to people with knowledge of the situation.
The two sides may sit down together as soon as Dec. 26, although a schedule for the talks hasn’t been confirmed, said the people, who asked not to be named because the matter is private.
Another attempt to reach a deal would follow the government’s decision to begin the process of shutting down the Cobre Panama open-pit after a protracted negotiation process failed to produce an accord by last week’s deadline.
An eleventh-hour agreement would come as a relief to the Canadian company’s shareholders and the tight global copper market, while also bolstering Panama’s reputation as an investor-friendly jurisdiction. There’s still time to strike a deal before interrupting mine operations given authorities gave the company 10 business days to submit a plan for putting the site on care and maintenance.
Analysts including Timna Tanners at Wolfe Research see the stoppage order as a negotiating tactic, although the government is said to have hired advisers to find a new operator.
The mine, which cost at least $10 billion to build, is First Quantum’s biggest asset and an economic engine for the Central American nation. First Quantum acquired the project in 2013 and began commercial production in 2019. The mine can churn out as much as 300,000 metric tons a year, or roughly 1.5% of global copper output.
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 current concession as unconstitutional. One of the sticking points in talks has been over a minimum $375 million annual contribution, with First Quantum pushing for protections in the case of much lower metal prices.
