Panama said this Friday that the negotiations with the Canadian company First Quantum Minerals to extend the concession of a copper mine are “stalled”, five days after the expiration of the term to sign.
The largest mine in Central America produces 300,000 tons of copper concentrate per year on the Panamanian Caribbean coast. It started producing in February 2019, contributes 75% of Panama’s export revenues and represents 4% of its Gross domestic product.
“Discussions about entering into a new contract have not progressed far enough and are at a standstill,” the Ministry of Trade and Industry said in a statement.
“Minera Panamá must sign an agreement regarding the Cobre Panamá mine no later than December 14, or the Panamanian government will proceed with alternative measures for the operation of the mine,” the ministry added, without specifying them.
In January, the Panamanian president, Laurentino Cortizo, gave an ultimatum to this company, which is listed on the Toronto Stock Exchange, to sign a new contract that will increase the amount of royalties it pays in Panama by 10 times.
Cortizo warned that with the new contract First Quantum Minerals would have to pay a “minimum” 375 million dollars annually to the Panamanian State.
“We will only accept an agreement that is fair for the Panamanian people and consistent with international standards,” the Panamanian ministry said on Friday.
If it does not sign it, the company must cease its operations in Panama after having invested more than 10,000 million dollars in the country and employing 7,200 workers.
On Tuesday, the head of the mining company in Panama, the Scotsman Keith Green, told AFP that the company “intends to reach an agreement.”