Disagreements between Canada and Panama may stop work of First Quantum

Budrigannews.com – First Quantum, a miner based in Canada (NASDAQ:) In a letter, the company stated that if the Central American government forces it to cease operations due to a contract dispute, it would suspend a “significant amount” of jobs at its Panama operations.

“The company will need to take steps to reduce expenditures across the board if we have to reduce operations to care and maintenance mode. The letter that was sent to employees and was seen by Reuters stated that “we could be forced to suspend a significant portion of our valued workforce.”

A consultant claims that the Cobre Panama mine of the company employs approximately 40,000 people, both directly and indirectly, and interacts with approximately 1,800 suppliers.

After missing a deadline for a new contract due to disagreements centered on royalties and tax payments, First Quantum was informed on December 21 that the government had issued an order for it to develop a strategy to cease operations within ten working days.

The letter, which was signed by General Manager Alan Delaney, stated, “This is a drastic and, in our view, unnecessary step, which will potentially have a huge impact on employees, our suppliers, and the community around us.”

The letter stated that First Quantum is working on the plan but expects to reach an agreement with the government before the order is implemented, and that the company will launch an appeal as its next step.

A request for information regarding the order’s timeline was not responded to by a government spokesperson. A request for clarification from the Canadian miner did not receive a response immediately.

Over the course of more than a year, the two parties have disagreed regarding the location of the company’s operations, contract stability, and payments to the government. The government has advocated for a $375 million increase in annual royalties.

The letter stated that First Quantum is prepared to meet or even exceed $375 million in annual royalties with downside protections, but it did not specify the remaining obstacles that prevent the parties from reaching a contract.