Panama ministers summoned to clarify doubts about flagship copper mine's status

Panamanian cabinet ministers must appear before lawmakers next Tuesday regarding the status of the new contract that the government is negotiating with Minera Panamá for the Cobre Panamá copper mine, said the president of the assembly, Crispiano Adames.

Adames said that trade and industry minister Federico Alfaro Boyd, environment minister Milciades Concepción, and mineral resources chief Jaime Pashales must answer a questionnaire.

"The summons is due to the interest of deputies from different parties in obtaining as much information as possible regarding the contract between the State and Minera Panamá and the negotiation process," said a statement from the national assembly.

Among the questions that the ministers will have to answer is if the negotiations were resumed after the meeting in the week of Christmas with the CEO of Minera Panamá’s parent company First Quantum Minerals, Tristan Pascall, and if there are established deadlines.

Reuters reported on Tuesday, citing an unnamed government-linked source, that among the issues raised in the negotiations with the miner were exclusive rights to explore for other minerals, expanding the area of its concession, a US$1bn tax credit for the Canadian company’s investment and the demand that no law enacted after the new contract affect its operations.

NEGOTIATIONS ON EDGE

After Christmas, the government and the company resumed talks on a new operating contract after Panama's highest court declared illegal in 2018 a law that promoted mining and under which the Cobre Panamá concession was granted in the 1990s.

President Laurentino Cortizo reported on Monday that the government presented First Quantum with the "final contract" for the mine, one of Latin America’s biggest copper producers, after the government rejected last Friday two legal appeals filed by Minera Panamá.

In December, the trade and industry ministry ordered the company to cease commercial operations at the mine and have a care and maintenance plan for the operation within 10 business days, which expired on Wednesday.

On December 28, First Quantum said in a statement that operations at Cobre Panamá were continuing as normal, but it has not updated that information since.

According to the government, the company breached an agreement reached last January under which Panama would receive a minimum annual contribution of US$375mn from the mine in royalties and taxes, among other terms.

Production guidance for the US$6.5bn mine was previously put at 330,000-360,000t copper for 2022.