By Valentine Hilaire and Steve Scherer
PANAMA CITY (Reuters) – Panama’s government is in talks with Canada-based miner First Quantum Minerals over the conditions under which it operates its flagship copper mine, the government’s Chief Revenue Officer Publio De Gracia said on Friday.
The official from the country’s economy and finance ministry said Panama was looking for a “fair” deal in which the company complies with the obligations its large operations demand.
“These activities are receiving important benefits and it is only fair that they comply with the obligations,” he said.
Panama’s government on Monday ordered First Quantum to pause operations at the Cobre Panama mine after the company missed a deadline to finalize a deal that would have increased annual tax and royalties payments to the government to at least $375 million.
A key asset for both parties, Cobre Panama accounts for roughly 3.5% of the country’s gross domestic product according to government figures, and according to a financial analyst generates around half of First Quantum’s core earnings.
Canada’s trade minister has been in contact with her counterpart in Panama in an effort to resolve the dispute, a Canadian government source said on Friday.
“Obviously, we have a keen interest in seeing resolution to this, and are optimistic that both parties are negotiating in good faith,” said the source, who is familiar with the discussions.
(Reporting by Valentine Hilaire in Panama City and Steve Scherer in Ottawa; Editing by Alistair Bell)
