PANAMA CITY (Reuters) – Canada-based miner First Quantum Minerals Ltd and its subsidiary Minera Panama started arbitration processes against Panama, the country’s ministry of commerce and industry said on Saturday, as the two sides have been locked in a disagreement over payments and mine operations.
Panama’s government on Monday ordered First Quantum to pause operations at its flagship Cobre Panama copper mine after the company missed a deadline to finalize a deal that would have increased payments to the government by at least $375 million.
Despite having agreed to meet with the government, the company decided on Friday to “advance efforts” by going ahead with two arbitration processes, the ministry said in a statement, without giving further details.
First Quantum did not immediately respond to a request for comment.
The company initiated one of the arbitration processes under a 1997 contract, which regulates its operations, and the other under the free trade agreement between Canada and Panama, the government added.
Panama was asking for a maintenance plan for the company, which is considered the largest private investment in the Central American country and accounts for roughly 3.5% of Panama’s gross domestic product.
“The resolution … that orders Minera Panama to accomplish a care and maintenance plan for the Panama copper mine remains in force, and the government will monitor its full compliance,” the ministry said in a statement.
(Reporting by Valentine Hilaire; Writing by Carolina Pulice; Editing by Josie Kao)
