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First Quantum says it hopes to avoid Panama arbitration over mine

Credit: REUTERS/STRINGER

Adds details on arbitration announcement, background on deal

PANAMA CITY, Nov 27 (Reuters) - Canadian miner First Quantum hopes to avoid arbitration with Panama's government over a major copper mine by instead resolving disagreements during a 90-day period for talks between both sides, the company said in a statement late on Monday.

First Quantum issued a legal notification of intent to start arbitration proceedings with the Central American country under an existing trade pact between Panama and Canada, Panama's government announced on Sunday.

The country's top court is currently weighing the validity of a contract that would extend operations at the massive open-pit Cobre Panama mine, following a series of legal challenges.

The company has been forced to halt operations due largely to blockades by protesters at a key port.

In a statement, Panama's trade ministry stressed it is prepared to defend the national interest.

Last month, lawmakers in Panama approved a new contract for First Quantum to continue operating the project, which included a minimum 20-year extension while guaranteeing $375 million a year in annual payments to the government.

Opponents of the mine argue that the contract is biased in favor of the miner, and criticize its environmental impact.

(Reporting by Elida Moreno; Editing by David Alire Garcia)

((Valentine.Hilaire@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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