Canadian mining giant says nearing deal on huge Panama pit

The Canadian mining giant First Quantum Minerals said Tuesday it is close to an agreement with Panama to avert the closure of Central America's largest copper mine.

But the government of Panama denied that the two sides were on the verge of reaching a deal, saying key issues remain unresolved.

The Cobre Panama mine is considered the largest private investment in Panama's history, making up four percent of its GDP and accounting for 75 percent of its export revenues.

Panama had given the company until mid-December to agree to a new contract under which the amount it pays annually for its mining concession would rise by a factor of 10, to at least $375 million.

"I don't think we're very far away," First Quantum Minerals CEO Tristan Pascall said during an analyst call about the ongoing talks with the Panamanian government.

The company added in a statement that it is willing to accept and in some cases surpass Panama's demands on money, environmental protection and workplace standards.

But the Panamanian government later said Pascall's remarks "do not reflect the reality of the situation" because the two sides "disagree on certain fundamental issues."

It said the company had made proposals that will boost its profits when copper prices are high and protect itself when prices are low.

Negotiations on a new contract at the huge open pit mine have been underway for more than a year but have deadlocked on the issue of how much the company would pay to Panama.

On December 15 Panamanian President Laurentino Cortizo increased pressure on the company by ordering the closure of the mine, except for maintenance work.

However, First Quantum Minerals said Tuesday that operations had actually never stopped but that it was preparing for such an eventuality, which it said would put thousands of people out of work.

"There has been progress and movements since December 14 and final items do need to be resolved, but they do need to be resolved fairly for us to close this out," Pascall said.

The huge copper deposit was discovered in 1968 and lies on Panama's Caribbean coast, 240 kilometers (150 miles) by road from the capital Panama City.

First Quantum, one of the largest copper miners in the world, began commercial copper production at the site in 2019, through its local affiliate, Minera Panama.

It has spent $10 billion on earthworks, construction of buildings to house more than 7,000 employees, the purchase of heavy machinery, a power plant, a port for deep-draft merchant ships, access roads, and re-forestation plans.