JP Morgan predicted a loss of investment grade for Panama due to the possibility of the closure of the mining project.
JP Morgan experts said that would be the first scenario renegotiate the contract and that the government manages to agree with First Quantum on new terms that calm social unrest.
Another scenario would be to reject it contract in its entirety and negotiate a new contract with another company.
The third option would involve the state of Panama taking control of the mine.
Under these last two scenarios, and under Article VIII of the International Treaty on the Promotion and Protection of Investments between Panama and Canada, the government would have to cover First Quantum for its investment, which is estimated to be around $7 billion.
The final scenario is that the mine ceases to operate, which seems unlikely to JP Morgan experts.
They warn that in this latter scenario tax losses and economically it would be serious.
But in any case, if the contract is canceled, experts from one of the world’s largest financial companies believe that the probability that Panama will lose its investment rating in the short term increases significantly.
Days of protests continue despite the measures announced by the government.
Source: Panama America
I am Jason Root, author with 24 Instant News. I specialize in the Economy section, and have been writing for this sector for the past three years. My work focuses on the latest economic developments around the world and how these developments impact businesses and people’s lives. I also write about current trends in economics, business strategies and investments.
