First Quantum Minerals Ltd. took the first step in an arbitration process with Panama as the Canadian firm's flagship copper operation faces anti-mining protests and a Supreme Court ruling on whether its contract is constitutional.   

The company said late Sunday that it issued an arbitration notice to President Laurentino Cortizo's administration. Panama extended First Quantum's mining license last month, before reacting to protests by proposing to put the mine's future to a popular vote. The referendum proposal and a push for congress to repeal the contract were subsequently shelved as the government waits to see if the Supreme Court will kill the agreement instead.

The dispute has called into question the very future of the US$10 billion Cobre Panama mine. Last week, the company halted commercial production as a port blockade chokes key supplies to an operation that accounts for more than 1 per cent of global copper supply. 

“First Quantum remains committed to overcoming the current operational challenges at Cobre Panama through constructive and transparent dialogue,” it said in a statement. The company trusts in its “robust legal position” and aims to find solutions in line with stakeholder interests and with the law.  

Still, the challenge facing the company in Panama was on display early Sunday when a group of protesters attacked workers leaving the mine, injuring eight, a union leader said.

First Quantum has lost about half its market value since Cortizo turned against the agreement in late October. The Supreme Court could issue a ruling anytime.