PANAMA CITY– Canada’s First Quantum Minerals Ltd. has actually requested arbitration procedures to resolve a Panamanian decision to halt a major open-pit copper mine concession in Panama or receive damages.
Quantum stated one arbitration was requested under the Canada-Panama Free Trade Agreement. It has also initiated proceedings before the International Court of Arbitration, which would convene in Miami, Florida, the company stated in a statement.
In a landmark 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 harm a forested coastal area and jeopardize water supplies.
Quantum stated it requested arbitration from the international panel on Wednesday and that it had initiated proceedings under the free trade agreement even before the court judgment. It did not state what solution or damages it was seeking, but did say it was open to discussions.
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 practical dialogue in order to reach an agreement,” the company stated.
The mine, which would be adjacent to the court judgment, has been a key economic engine for the country since the mine started massive production in 2019.
Efforts this year to grant the company the 20-year concession sparked massive demonstrations that paralyzed the Central American nation for over a month, mobilizing a broad swath of society, including Indigenous communities, who said the mine was devastating crucial environments.
The company has stated the mine generates 40,000 jobs, including 7,000 direct jobs, and contributes the equivalent of 5% of Panama’s GDP.
The company stated it would take time to properly close the mine.
“The Court’s decision does not take into account a planned and managed closure situation, in which crucial 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 agreement that was settled in October. Due to the legal dispute, the amount went directly to a restricted account.
The agreement also stated that Panama would receive at least $375 million annually from the mining company, an amount that critics considered paltry.
Cobre Panama issued 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 “disastrous consequences.”
The move also “jeopardizes” all of Panama’s other business contracts, the company said.
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