Canada’s trade minister has been in contact with her counterpart in Panama in an effort to resolve a dispute over future payments First Quantum Minerals Ltd. FM-T must make to operate its flagship copper mine in the country, a government source said on Friday.
After efforts to reach a deal failed, Panama on Dec. 15 said First Quantum must shut down its Cobre Panama mine.
“Obviously, we have a keen interest in seeing resolution to this, and are optimistic that both parties are negotiating in good faith,” said the source, who is familiar with the discussions.
Canada’s Trade Minister Mary Ng spoke with Panama’s Commerce and Industries Minister Federico Alfaro about a week ago, the source said, and they have remained in contact by chat since then.
“We have also heard from (the company) to ensure that Minister Ng and our team stays engaged in keeping this on the front burner,” said the source, who was not authorized to speak on the record.
The Cobre Panama mine is considered the largest private investment in the Central American country, accounting for roughly 3.5% of its gross domestic product.
First Quantum reported revenue from Cobre Panama of $2.29 billion in the first nine months of this year. It shares the joint venture with Korea Panama Mining Corp (KPMC), which holds a 20% stake.
The dispute centres around Panama seeking an increase in annual payments to at least $375 million. The source said the company “is very sympathetic” to the request for higher tax commitments.
First Quantum “just needs some downside protection in the event that commodities prices go low … but that’s all the company is looking for,” the source said.
Though mainly focused on copper, First Quantum also mines nickel, zinc and cobalt in projects across South America, Africa, Europe and Australia.