INMET’s $6.2bn copper project on Panama’s Caribbean coast. Petaquilla Minerals has laid claim to land adjoining the project, needed by Inmet for a tailings dump. Petaquilla’s chairman, Richard Fifer-Carles, was previously chairman of Panama’s national mining company.

INMET’s $6.2bn copper project on Panama’s Caribbean coast. Petaquilla Minerals has laid claim to land adjoining the project, needed by Inmet for a tailings dump. Petaquilla’s chairman, Richard Fifer-Carles, was previously chairman of Panama’s national mining company.

Inmet Escalates Petaquilla Tensions in Panama

Issue 20, November 2012

A quirk of Panama’s mining code has caused a public spat between two of the country’s most influential mining companies. Inmet Mining and Petaquilla Minerals have issued a series of increasingly acrimonious statements against one another, over Inmet’s right to use land adjoining its Cobre copper concessions.

Petaquilla, which claims privilege to the land, has accused Inmet of trying to “confuse” shareholders to “expropriate” value, whilst Inmet, which needs the ground for a tailings dump, describes it as “state-owned.”

Inmet’s twofold claim that it is entitled to use the land, but that it is not critical to the development of the Cobre mine, seems at odds with its $130m bid for Petaquilla, rejected by shareholders this week.

Cobre has a 32bn pound copper resource and is seen as the largest investment in Panama since construction of the Panama Canal, with an expected capital cost of $6.2bn.

Inmet is aiming for cash costs of $0.82 per pound and first shipment by early 2016. It has successfully raised funding for the project, issuing $1.5bn in debt and selling a 20 per cent stake to a Japanese-Korean joint-venture for $199m. In April, it also announced a streaming agreement with Franco- Nevada, which will receive gold from the mine for $400 per ounce in exchange for fronting $1bn in capital costs. The deposit has a gold resource of 9m ounces.

Petaquilla has said it is committed to negotiations. The company’s Chairman previously led Panama’s national mining company. “There will be plenty of opportunity to work together and try to do the best for our two companies,” said chief executive Joao Manuel. “It can be done on a very friendly basis.” Inmet maintains that discussions have broken down, declining to comment.

Positioned in virgin rainforest, the Cobre project has attracted environmental concerns and indigenous opposition. Panama’s president, Ricardo Martinelli, who won power in 2009 on pledges to cut political corruption, has taken a tough line on protests against mining and hydroelectric power.

His popularity has since declined, following accusations he accepted bribes as part of an Italian arms deal, including a helicopter with a Hermes interior.

“It can be done on a very friendly basis.”
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