Panama says talks with First Quantum making headway
Cecilia Jamasmie | February 10, 2023 |
Cobre Panama mine, the company’s largest copper operation. (Image: First Quantum Minerals.)
Panama’s government said negotiations with First Quantum Minerals (TSX: FM) about agreeing on a contract governing the company’s Cobre Panama copper complex, have shown signs of progress this week.
The country’s Minister of Commerce and Industry Federico Alfaro’s comments, reported by BNamericas, is the latest development in a long-drawn-out dispute over control of one of the world’s largest new copper mines.
It is also a slight, but certain change of tone in the way Panama has addressed the issue since December last year, when President Laurentino Cortizo ordered the halt of operations at Cobre Panama following the parties’ failure to agree on the terms for a new contract.
“We have advanced,” Alfaro said after an event to inaugurate the new board of the Panamanian exporters association (APEX) in Panama City.
The minister noted the parties will continue negotiating within the framework of a free trade agreement between Canada and Panama and international arbitration rules.
“I prefer to see the glass half full (…) I believe there’s an opportunity to agree on some legal discrepancies that still remain regarding the wording of the contract. I hope the company understands that the government’s position isn’t just a whim,” Alfaro told journalists.
The main bone of contention centres on taxes and royalties the Canadian miner should pay on its concession to the government of the Central America country.
First Quantum said on Monday that Panama’s maritime authority had taken “several actions to obstruct operations” at the company’s Punta Rincon shipping terminal. These measures included, according to the Vancouver-based miner, “conducting extraordinary and unusual” inspections and instructing maritime pilots “not to provide service to vessels.”
Cobre Panama mine, the company’s largest copper operation. (Image: First Quantum Minerals.)
Panama’s government said negotiations with First Quantum Minerals (TSX: FM) about agreeing on a contract governing the company’s Cobre Panama copper complex, have shown signs of progress this week.
The country’s Minister of Commerce and Industry Federico Alfaro’s comments, reported by BNamericas, is the latest development in a long-drawn-out dispute over control of one of the world’s largest new copper mines.
It is also a slight, but certain change of tone in the way Panama has addressed the issue since December last year, when President Laurentino Cortizo ordered the halt of operations at Cobre Panama following the parties’ failure to agree on the terms for a new contract.
“We have advanced,” Alfaro said after an event to inaugurate the new board of the Panamanian exporters association (APEX) in Panama City.
The minister noted the parties will continue negotiating within the framework of a free trade agreement between Canada and Panama and international arbitration rules.
“I prefer to see the glass half full (…) I believe there’s an opportunity to agree on some legal discrepancies that still remain regarding the wording of the contract. I hope the company understands that the government’s position isn’t just a whim,” Alfaro told journalists.
The main bone of contention centres on taxes and royalties the Canadian miner should pay on its concession to the government of the Central America country.
First Quantum said on Monday that Panama’s maritime authority had taken “several actions to obstruct operations” at the company’s Punta Rincon shipping terminal. These measures included, according to the Vancouver-based miner, “conducting extraordinary and unusual” inspections and instructing maritime pilots “not to provide service to vessels.”
Copper shipments from Cobre Panama. (Image courtesy of Cobre Panama.)
What seems to concern the company the most is an order that forces it to stop the loading of copper concentrates until it produces a third-party assessment confirming its scales have been properly balanced.
The miner, which said it submitted the proof on Feb. 3, warned it would have to shut down the massive operation by mid-February because of limited storage capacity.
Largest Central America copper mine
Cobre Panama remains in operations, though First Quantum is expected to submit a plan to put the mine under care and maintenance.
Minister Alfaro says the company has been running the mine without a contract since 2017, when the country’s Supreme Court ruled the accord governing the copper mine was unconstitutional and annulled it.
First Quantum chief executive officer, Tristan Pascall, has repeatedly said the Panamanian government had previously assured the company that the contract remained valid despite the court’s decision.
First Quantum is one of the world’s top copper miners and Canada’s largest producer of the metal. It churned out 816,000 tonnes of copper in 2021, its highest ever, thanks mainly to record output at Cobre Panama.
The Cobre Panama mine complex, located about 120 km west of Panama City and 20 km from the Atlantic coast, contributes 3.5% of the Central American country’s gross domestic product, according to government figures.
The asset is estimated to hold 3.1 billion tonnes in proven and probable reserves and at full capacity can produce more than 300,000 tonnes of copper per year, or about 1.5% of global production of the metal.
What seems to concern the company the most is an order that forces it to stop the loading of copper concentrates until it produces a third-party assessment confirming its scales have been properly balanced.
The miner, which said it submitted the proof on Feb. 3, warned it would have to shut down the massive operation by mid-February because of limited storage capacity.
Largest Central America copper mine
Cobre Panama remains in operations, though First Quantum is expected to submit a plan to put the mine under care and maintenance.
Minister Alfaro says the company has been running the mine without a contract since 2017, when the country’s Supreme Court ruled the accord governing the copper mine was unconstitutional and annulled it.
First Quantum chief executive officer, Tristan Pascall, has repeatedly said the Panamanian government had previously assured the company that the contract remained valid despite the court’s decision.
First Quantum is one of the world’s top copper miners and Canada’s largest producer of the metal. It churned out 816,000 tonnes of copper in 2021, its highest ever, thanks mainly to record output at Cobre Panama.
The Cobre Panama mine complex, located about 120 km west of Panama City and 20 km from the Atlantic coast, contributes 3.5% of the Central American country’s gross domestic product, according to government figures.
The asset is estimated to hold 3.1 billion tonnes in proven and probable reserves and at full capacity can produce more than 300,000 tonnes of copper per year, or about 1.5% of global production of the metal.
First Quantum suspends loading operations at Cobre Panamá port
MINING.COM Staff Writer | February 6, 2023 |
Cobre Panama. (Image courtesy of Minera Panama).
First Quantum (TSX: FM) said on Monday its subsidiary Minera Panama, the operator of the Cobre Panama copper mine, has suspended concentrate loading operations at the Cobre Panamá port.
According to the company, a resolution was issued by the Panamá Maritime Authority and requires the suspension of concentrate loading operations at the Cobre Panamá port until evidence is provided that the process of certification of the calibration of the scales by an accredited company has been initiated
The miner added that it might become necessary to shut down Cobre Panama if the concentrate is not shipped by mid-February, due to limited storage capacity on site.
First Quantum Minerals and the Panamanian government have been disputing how much tax the Canadian miner should pay on its concession for the Central American country’s only major copper mine.
In December, the Panamanian chapter of Transparency International (TI) issued a communiqué denouncing what the organization deems as a lack of clarity in the negotiations between the government of President Laurentino Cortizo and Minera Panamá.
In 2021, Cobre Panama represented more than half of First Quantum’s earnings before interest, tax depreciation and amortization. It also accounts for about 3.5% of Panama’s gross domestic product.
The asset is estimated to hold 3.1 billion tonnes in proven and probable reserves and at full capacity can produce more than 300,000 tonnes of copper per year, or about 1.5% of global production of the metal.
First Quantum said that its subsidiary initiated the certification process by submitting the required proof to an accredited company on February 3.
(With files from Reuters)
Cobre Panama. (Image courtesy of Minera Panama).
First Quantum (TSX: FM) said on Monday its subsidiary Minera Panama, the operator of the Cobre Panama copper mine, has suspended concentrate loading operations at the Cobre Panamá port.
According to the company, a resolution was issued by the Panamá Maritime Authority and requires the suspension of concentrate loading operations at the Cobre Panamá port until evidence is provided that the process of certification of the calibration of the scales by an accredited company has been initiated
The miner added that it might become necessary to shut down Cobre Panama if the concentrate is not shipped by mid-February, due to limited storage capacity on site.
First Quantum Minerals and the Panamanian government have been disputing how much tax the Canadian miner should pay on its concession for the Central American country’s only major copper mine.
In December, the Panamanian chapter of Transparency International (TI) issued a communiqué denouncing what the organization deems as a lack of clarity in the negotiations between the government of President Laurentino Cortizo and Minera Panamá.
In 2021, Cobre Panama represented more than half of First Quantum’s earnings before interest, tax depreciation and amortization. It also accounts for about 3.5% of Panama’s gross domestic product.
The asset is estimated to hold 3.1 billion tonnes in proven and probable reserves and at full capacity can produce more than 300,000 tonnes of copper per year, or about 1.5% of global production of the metal.
First Quantum said that its subsidiary initiated the certification process by submitting the required proof to an accredited company on February 3.
(With files from Reuters)
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