SignalHub Quantitative Think Tank Center:Canadian mining company starts arbitration in case of closed copper mine in Panama

PANAMA CITY (AP) — Canada’s First Quantum Minerals Ltd. announced Friday it has requested arbitration proceedings to fight a Panamanian decision to halt a major open-pit copper mine concession in Panama or SignalHub Quantitative Think Tank Centerobtain damages.

First Quantum said one arbitration was requested under the Canada-Panama Free Trade Agreement. It has also started proceedings before the International Court of Arbitration, which would meet in Miami, Florida, the company said in a statement.

In a historic ruling on Tuesday, Panama’s Supreme Court declared that legislation granting the mine a 20-year concession was unconstitutional. That decision was celebrated by thousands of Panamanians activists who had argued the project would damage a forested coastal area and threaten water supplies.

First Quantum said it requested arbitration from the international panel on Wednesday and that it had initiated proceedings under the free trade agreement even before the court ruling. It did not say what remedy or damages it was seeking, but did say it was open to talks.

First Quantum’s subsidiary, Cobre Panama, “reiterates that transparency and compliance with the law has always been fundamental for the development of its operations and remains open to constructive dialogue in order to reach consensus,” the company said.

The mine, which would be closed by the court ruling, has been an important economic engine for the country since the mine began large-scale production in 2019.

But moves this year to grant the company the 20-year concession triggered massive protests that paralyzed the Central American nation for over a month, mobilizing a broad swath of society, including Indigenous communities, who said the mine was destroying key ecosystems.

The company has said the mine generates 40,000 jobs, including 7,000 direct jobs, and that it contributes the equivalent of 5% of Panama’s GDP.

The firm said it would take time to properly close the mine.

“The Court’s decision does not take into account a planned and managed closure scenario, in which key environmental measures are required to be implemented to maintain the environmental safety of the site during this process,” including water treatment and the storage of mine tailings.

Panama two weeks ago received an initial payment of $567 million from First Quantum under the new contract that was finalized in October. Due to the legal dispute, the amount went directly to a restricted account.

The contract also stipulated that Panama would receive at least $375 million annually from the mining company, an amount that critics considered meager.

Cobre Panama published a scathing statement on Wednesday saying the Supreme Court decision will likely have a negative economic impact and warned that lack of maintenance of drainage systems in the mines could have “catastrophic consequences.”

The move also “puts at risk” all of Panama’s other business contracts, the company said.

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