Monday
Monday 5th August 2024.
August 4, 2024
Unlike its partners, who have already begun the arbitration process against Panama for the closure of the copper mine located in the Donoso Mountains, First Quantum has indicated that it has up to 3 years to present its claim, in accordance with the provisions of the Free Trade Agreement (FTA) signed between Panama and Canada in 2010.
At the end of June, Franco-Nevada, also from Canada, filed an arbitration claim against Panama under the guidelines of the FTA with Canada, requesting compensation of 5 billion dollars. Franco-Nevada is a partner of First Quantum and they had an agreement for the purchase of gold, backed by financing of 1 billion dollars.
In its second quarter financial statement, First Quantum said it is pursuing two arbitration proceedings against Panama, seeking $20 billion in compensation. While the company maintains its position that arbitration is not the preferred outcome for the situation in Panama and that it remains committed to dialogue with the new government, it also notes that it has every right to seek any appropriate compensation through arbitration.
“The company has the right to file its claim for arbitration under the FTA within three years of Panama’s violation of the FTA,” the company said.
Regarding the lawsuit filed at the International Chamber of Commerce (ICC), Tristan Pascall, CEO of the Canadian mining company, commented that the final hearing is scheduled for September 25, 2025. The lawsuit was filed based on the arbitration clause of the concession contract that Laurentino Cortizo’s government signed at the end of October 2023, and which a month later was declared unconstitutional by the Supreme Court of Justice.
Arbitration claims were one of the main topics during the second quarter earnings conference call between First Quantum executives and financial market analysts. Analysts also wanted to know the company’s position on President José Raúl Mulino’s remarks regarding the closure of the copper mine.
Pascall said the company remains open to dialogue and sees the government’s decision to hire an independent auditor to assess the state of the mine as positive. They estimate that the issue will be discussed in depth by the authorities next year, although they acknowledge that they have held talks with officials, as Mulino recently revealed. “I think the consequences of doing nothing at the mine will be very serious for the environment, so we welcome this audit, which we hope will understand that doing nothing now is not a good solution for the country,” Pascall said.
The recently confirmed director of the Urban and Residential Cleaning Authority (AAUD), Ovil Moreno, said that, given the shortage of mobile equipment for waste collection in the district of Panama and the economic problems they face, the possibility of using Mi Bus workshops for the repair of the garbage trucks is being analyzed .
According to Moreno , the initiative to use the mechanical workshops of the Mi Bus company is being analyzed by the Ministry of the Presidency, through its head, Juan Carlos Orillac , who on July 25 visited the Operation and Execution Center (COE) of Ojo de Agua.
“The Minister of the Presidency, Orillac , told me that he is trying to establish a link with Mi Bus, since the company has a much more robust workshop than the one we have (AAUD) to be able to evaluate the equipment,” said the director of cleaning.
According to Moreno , there are garbage trucks that can be repaired, but they must first be evaluated. Currently, the AAUD has approximately 20 trucks authorized to provide the collection service.
Moreno said it is more feasible to invest in the repair of a truck, which costs between $10,000 and $15,000, and thus recover rolling stock that costs around $150,000.
The director of AAUD explained that, for the moment, the institution faces many economic problems, such as the debt from the arbitration award with the company Urbalia, SA , in which they were ordered to pay $26 million. In addition, they face expired terms of around $27 million and a debt from users of around $120 million.
Given this complex economic situation, Moreno said that if they decide to buy trucks in the future, they should be purchased with a warranty and maintenance included for at least five years.
At the moment, the Mi Bus company is in the process of repairing some 170 metrobus units in its workshops, which are repaired as the spare parts for the air conditioners arrive.
Additionally, Carlos Sánchez Fábrega, manager of Mi Bus, announced the need to reinforce the workshops with more qualified personnel, such as mechanics, assistants, bodyworkers, refrigeration technicians, among others, with the aim of repairing the largest number of buses.
Mi Bus has 1,436 units, of which 730 are operational.
Family members, friends, neighbors and members of civil society from the district of San Miguelito joined together this weekend to demand justice for the death of Rosa Rodríguez , a 25-year-old woman who was facing mental health problems.
Rosa was the victim of a brutal and inhuman act: she was doused with gasoline and burned alive. The autopsy report from the Institute of Legal Medicine and Forensic Sciences of Panama reveals the extent of her suffering: burns that affected at least 70% of her body and severe damage to her internal organs, the result of the fire that consumed her from within.
The case is being investigated as a femicide, and two suspects have so far been identified.
The shockwaves that have been caused on social media are evident, leaving everyone questioning how such horrendous acts of violence have been allowed to happen.
The people, dressed in white and holding balloons of the same colour, remembered Rosa as a calm and cooperative person.
One of the most notable complaints against the previous administration (2019-2024) was the management of late payments to developers affiliated with the Housing Solidarity Fund of the Ministry of Housing and Territorial Planning (Miviot).
In April of this year, representatives of some 200 companies announced that the National Government owed them $140 million from the program, which put 16,000 low-income households in “danger. ”
This program involves a $10,000 bonus or subsidy granted through Miviot to people who want to buy their first home, whose sale price does not exceed $70,000. It is an incentive for families with limited budgets and also benefits developers who participate in the construction of homes below that price range.
The minister of this entity, Jaime Jované , pointed out during a transfer of departure in the National Assembly that approximately $60 million are still owed to the promoters as part of the program.
Jované explained that there is currently no budget or law to support the $10,000 bonus for homes that were not built until June 30, 2024; however, the State will honor the payment for those that were built until that date.
“We have done many exercises and talked with different unions and contractors because this decree must be reviewed so that it really reaches where it needs to go and that there are funds to cover it. When there is a shortage, the State must decide where the best effects are generated,” he added.
The interest rate on mortgage loans will tend to rise in this third quarter (July, August and September), according to estimates by the Superintendency of Banks of Panama, in an analysis carried out in the June Banking Activity report published yesterday Friday.
The regulator’s analysis details that the preferential interest rate had remained stable since the second half of 2019 at 5.75%, being one of the most stable rates in the credit portfolio. But since the third quarter of 2023 it has risen to stand at 6%.
“ New calculations indicate that this rate will increase to 6.25% by the third quarter of 2024 ,” the SBP said.
Both the Superintendent of Banks of Panama, Amauri Castillo, and the President of the Board of Directors of the Banking Association of Panama, Raúl Guizado, have indicated that the effect of the rise in interest rates in the United States in recent years is barely being felt this year in Panama, so an increase in interest rates is to be expected in the remainder of 2024.
“It is important to note that in Panama, the interest rate market, in general, tends to respond with a certain lag and experiences smaller changes compared to those applied by these other jurisdictions,” said the banking regulator. In countries such as the United States, mortgage rates exceed 7% and in some cases above 8%.
When the reference mortgage interest rate increases, the proportion of the rate that customers with preferential interest rates must pay also automatically changes.
If the reference mortgage interest rate in Panama is 6.25%, a client who has purchased a home for a price of up to $120,000 will have to pay 2.25% interest, since the remaining 4% is assumed by the State as part of the preferential interest subsidy set by law.
At the end of June, financing for housing registered an annual growth of 4.29% to reach a total balance of $19,607 million, that is, an additional $807 million as of June 2023. This week, Moody’s warned about the increase in the delinquency of some loans such as mortgages. However, the banking regulator believes that they are tending to normalize.
“The default and risk indicators for the consumer portfolio are still at high levels, but have shown stability in recent months,” the regulator said.
The National Civil Protection System (Sinaproc) issued a warning for significant rain and storms over the national territory on Saturday.
The entity reported that the alert is in effect from this Saturday, August 3, until next Tuesday, August 6.
He explained that the areas under warning are all provinces, regions and maritime sectors.
For its part, the Institute of Meteorology and Hydrology of Panama (Imhpa) indicated that the Panamanian territory is under surveillance for a new period of rain with greater atmospheric instability, generated by a better activation and organization of the low pressure systems of the region, associated with the intertropical convergence zone. This factor, it indicated, favors the generation of heavy rains with thunderstorms.
“Daily water accumulations of between 40 mm and 100 mm are expected,” added the Imhpa.