First Quantum Minerals Ltd. might not be as close to resolving its differences with the Panamanian government as the company suggested earlier this week.
Chief executive Tristan Pascal said on a Jan. 10 conference call that First Quantum and Panama weren’t “far away” from a new agreement that would allow the Vancouver-based company to continue operating the Cobre Panama mine, one of the most significant deposits of copper on the planet.
But Panama is sticking to a hard line. The country’s industry minister, Frederico Alfaro Boyd, said First Quantum would have to meet the government’s terms if it wants to continue operating in the Central American country.
“The ball is in their court,” Alfaro Boyd said in an interview on Jan. 12. “It’s up to them, they know that the clock is ticking.”
First Quantum has been negotiating a new contract for the rights to exploit Cobre Panama, situated about 120 kilometres west of Panama City, for about a year. Talks broke down temporarily in mid-December after a deadline to sign a new contract was missed and the Panama government ordered the miner to make plans to temporarily suspend operations.
The mine continues to operate, although First Quantum, in accordance with the government’s order, is in the process of submitting a plan to put the mine under care and maintenance.
Alfaro Boyd’s tough stance could be a negotiating tactic. Regardless, the minister said there was still a “significant gap” on certain terms of the contract. Issues include the amount of money the government would pay First Quantum if the contract was terminated and tax provisions, which Alfaro Boyd described as, “fundamental aspects that the government of Panama has to retain in order to safeguard the rights to the Panamanian people.”
The minister added that the new contract will include stricter regulations on environmental, legal and labour issues that are “more in line” with other resource-rich nations.
With three billion tonnes of reserves, Cobre Panama is one of the largest new copper mines to open globally in the past decade, according to First Quantum.