Panama rejects Canadian mining company appeals

Despite the negotiations held with the executive director of First Quantum, Tristán Pascall, between December 26 and 28, the Ministry of Commerce and Industries (Mici) rejected two appeals filed by the lawyers for the mining company with Headquartered in Toronto.

The resources were intended to reverse the provisions of a Cabinet Resolution to take the necessary actions to guarantee the maintenance and care plan that will be established in the project during the close of business operations. The order was issued after the deadline given by President Cortizo for Minera Panamá to formalize a January agreement and guarantee the continuity of its operations in Donoso, Colón.

The company also appealed the decision of the Mici Mineral Resources Directorate, which established a period of 10 business days for the company to present the maintenance and care plan, where the operation of the plant is reduced to a minimum.

According to a Mici statement, the appeals were rejected and the plan to end the relationship with the mining company is maintained, “since the contractual differences raised by the Government have not been resolved, which reflect a fair agreement for the Panamanian people ”.

In January, the mining company, which has 13,600 hectares under concession, accepted the new economic terms presented by the Government to sign a new contract in which the company would begin to pay royalties based on a percentage of the gross profit of the Panama Copper project. Until now, it paid 2% on gross sales, as agreed in the legal contract signed in 1997, the same one that in 2017 was annulled by a ruling of the Supreme Court.

The $375 million per year would be the product of a percentage of the profit (which could range between 12% and 16%) and the payment of taxes from which the mining company has been exempted, according to the 1997 contract law. 

In its last statement, issued on December 28, First Quantum indicated that operations at the mine continued regularly, despite the fact that it had already been notified of the resolution that orders the presentation of the plan of maintenance.

Ongoing  Operations 
The company did not specify what day it was notified, but it did say that its legal team had filed legal appeals before the Panamanian courts and that it was preparing two arbitrations against the Panamanian State: one under the terms provided in the Free Trade Agreement signed by Panama and Canada, and the second based on the clauses of the contract signed in 1997.

“We appreciate the constructive engagement of the Government of Panama this week. The preferred option for both parties is to reach a balanced agreement that benefits all parties for many years. We have ambitious plans for Cobre Panama and strongly believe that an agreement would pave the way for additional investment in Panama and its people,” Pascall commented.