Panama’s President Laurentino Cortizo ordered Minera Panamá, S.A. (MPSA), a subsidiary of First Quantum Minerals Ltd. (FQM), to cease operations at the Cobre Panama copper mine for failing to reach a beneficial agreement for both parties. The government, for its part, said that the Canadian company did not fulfill its commitment to the Panamanian people.

“MPSA made significant progress in negotiations with the Government of Panamá over the past several weeks and came very close to an agreement to secure the long-term future of the Cobre Panamá mine before the Government halted discussions and announced plans to order MPSA to suspend operations,” FQM said in a prepared statement.

The parties failed to agree on a $375 million per year tax and royalty proposal that FQM submitted. The mining company said it wanted to hedge against falling copper prices. With social security contributions from MPSA and its employees, and other payments for permits, water and municipalities, FQM said Cobre Panamá and its employees would contribute more than $500 million each year in revenues to the government at current copper prices.

The MPSA contract was renewed in 2017 and remains in legal standing for a period until 2037. The mine, which represents the largest private investment in Panama ($10 billion), has been operating since 2019 and provides thousands of direct and indirect jobs.