Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
Canada’s first quantum mineral on Monday said it had receding from a multi-billion-dollarbitration request to the Panama government over the closure of the world’s largest copper mine.
The company suspended one case and dropped another. This dropped another case with a signal that a resolution could soon be made on one of the biggest investor state conflicts in history.
First Quantum’s local subsidiary was seeking more than $20 billion in damages.
The news gives Panama’s President Jose Raul Murino a breathing room, who has been facing Mount’s challenges since taking office last year.
Panama is facing a volatile financial situation due to uncertainty about future revenues from the mines, fighting the threat of reclaiming the Panama Canal against alleged Chinese influences in the waterway.
When First Quantum suddenly closed in 2023 following protests over allegations of corruption and environmental concern, it had invested around $10 billion in the Cobre Panama Copper Mine, Central America’s largest foreign direct investment.
The closure has hit Panama’s business-friendly reputation. The mines have generated more than 3% of GDP and hundreds of millions of dollars in government revenue.
The Panama government has long said that the company must withdraw its arbitration cases for the consultation to restart. “Panama is not going to sit on his head with a gun and solve the problem,” Murino said last year.
The first Quantum said on Monday it suspended arbitration notices filed under the Canada-Panamanian bilateral free trade agreement and dropped another case filed in the Paris-based International Chamber of Commerce and Industry’s international arbitration court.
It said it was “committed to being part of dialogue with the Panama government and a solution for the country and the people of Panama.”
Recommended
The future of mines is a sensitive economic and political issue, and country leaders are eager to avoid repeated social upheavals that have led to their closure.
Environmentalists are pushing for responsible closures of sites, but some people in the private sector want it to be renegotiated with the company or bid again.
How Panama handles mines is being monitored closely as the country is working to put pressure on the Panama Canal.
Chinese authorities are considering the reserve transaction that CK Hutchison has reached and are selling the port business to a group led by US investor BlackRock. The Panama government secretary is auditing the local subsidiary that operates the port.
