Panama vows to talk to First Quantum in coming months on shuttered mine

“From the environmental standpoint, it has to be dealt with in the coming months,” Martinez-Acha Vasquez said in an interview at a Council of the Americas event in Washington. “I can’t say how many months, but we will be responsible and hold a dialogue with the Canadians.”

First Quantum’s $10 billion mine was abruptly shuttered last year after Panama’s Supreme Court ruled that its operating contract was unconstitutional. Panama President Jose Raul Mulino has ordered an environmental audit of the mine to help determine whether the facility can be reopened temporarily.

“Whatever the decision, in order to close it, it has to be opened and operated for environmental reasons,” Martinez-Acha Vasquez said. “You can’t leave an open-pit mine in those conditions. We are a responsible country and we will talk with the Canadian investors when the time comes.”

Vancouver-based First Quantum declined to comment.

The mine’s closure led to a deceleration of economic growth, though the national economy still expanded roughly 3% in the first half of this year, the minister said. He said the new government is “optimistic that we can maintain that percentage.”

Meanwhile, the new government is tackling matters such as water supply in the Panama Canal and social security reforms, while working to rein in its fiscal deficit and maintain the country’s investment grade credit rating, Martinez-Acha Vasquez said. Panama was downgraded to junk in March by Fitch, but maintains investment grade from S&P Global Ratings and Moody’s Ratings.

(By Michael McDonald and Jacob Lorinc)