Panama's government on Thursday ordered Canada's First Quantum Minerals (TSX:FM) to suspend operations at its flagship copper mine in the country after the company missed a deadline to finalise a deal that would increase the mine's payments to the government.
The government has given Minera Panama, majority-owned by First Quantum Minerals, until Wednesday to sign an agreement reached in January to pay the government $375m a year from its Cobre Panama mine.
The Panamanian government ordered the Ministry of Commerce and Industry to suspend Minera Panama's operations at the mine after a midnight deadline was missed.
Months of negotiations between miners and the government continued into the early hours of Thursday morning, the commerce ministry said. The miner then sent a new proposal that "fundamentally" changed the economics of the deal, it added.
The Toronto-based mining company said earlier on Thursday that the deal had not been finalised as it was "unable to reach the necessary legal protections for termination, stabilisation and transitional arrangements"
The company, which earlier said it was open to further dialogue, did not immediately respond to the announcement of the suspension.
Panamanian authorities and the company began negotiating a new concession contract late last year after President Laurentino Cortizo promised better benefits for the country from the mine.
The $6 billion investment in First Quantum Mineral's open pit mine, which began operations in 2019, is believed to be the largest private investment in the Central American country and accounts for about 3.5 percent of Panama's gross domestic product.
