First Quantum would seek $20 billion from Panama for Mine closing

Canadian mining giant First Quantum Minerals, parent of Minera Panama, said Wednesday that it would seek $20 billion through international arbitration after Panama ordered the closure of the company’s flagship copper mine.

The company reports that it has lost more than half of its market value after the Supreme Court of Justice declared unconstitutional the contract between the company and the Panamanian State.

“We have provided a minimum value sought in those proceedings of $20 billion, reflecting an estimated fair market value of the initial investment,” First Quantum CEO Tristan Pascall said during a conference call with market analysts.

He indicated that the company could obtain an amount much greater than that mentioned in the arbitration process if damages and interest were computed.

However, he also specified that arbitration is not the path the company prefers.

“We would prefer to reach an agreement with the State of Panama that results in the best result for the people and the company,” he said.

Although since the beginning of February, Pascall had already indicated that the company prefers to reach an agreement with the Panamanian government, he also indicated that the two arbitration demands that it presented at the end of 2023 are maintained.

In the transcript of the call with market analysts, Pascall reiterated that they have initiated international arbitration processes, including notification under the free trade agreement between Canada and Panama, and before the International Court of Arbitration of the International Chamber of Commerce concerning the 2023 concession contract.

But “that said, arbitration is not our preferred outcome and we continue to engage in constructive communication with the Government while remaining committed to Panama and being part of a long-term solution that provides the best outcome for the country and Panamanians.

Cooling zone
The Government has understood that the arbitration process remains in a cooling zone. However, in the country, it is unknown what type of agreement the parties could reach against arbitration, after the contract was declared unconstitutional, and environmental, union, student, educator, and citizen groups, in general, disagreed with the mining activity.

At least 10 market analysts participated in the call with Pascall.