First Quantum Minerals ( OTCPK:FQVLF ) plans to appeal an order by Panama's government to stop production at the massive Cobre Panama copper mine as the two sides try to reach agreement in a tax dispute , Bloomberg reported Monday.
The two sides have been negotiating new tax terms for more than a year on the mine that accounts for ~1.5% of global copper production.
Cobre Panama generates ~40K direct and indirect jobs, and First Quantum ( OTCPK:FQVLF ) said it would be forced to suspend "a significant amount" of workers if the mine goes into care and maintenance mode.
A major sticking point has been over a minimum $375M in annual royalties, with First Quantum ( OTCPK:FQVLF ) seeking an exception in the case of much lower metal prices and profit even while saying it is prepared to meet and even exceed the amount as long as it includes downside protections.
First Quantum Minerals ( OTCPK:FQVLF ) "could be hit hard by copper's bearish outlook," Alberto Abaterusso writes in an analysis published on Seeking Alpha .
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First Quantum will appeal Panama government order to stop copper mine