Panama’s president-elect said he won’t engage in talks to reopen a giant copper mine until its operator, First Quantum Minerals Ltd., drops arbitration proceedings against the Central American nation.

Speaking to the “Panama en Directo” radio show, Jose Raul Mulino said the country’s Supreme Court “has spoken, for good or bad” in deeming First Quantum’s mining contract for the Cobre Panama operation as being “plagued with unconstitutionalities,” and that any new talks would require an entirely different operating model.

The mine has been shuttered since November, when Panama’s outgoing President Laurentino Cortizo ordered the closure after the court ruling that followed months of civil unrest across the country over the contract. First Quantum said it will seek talks with Mulino to find a resolution for its flagship asset, which accounted for about two-thirds of the company’s profit last year.

First Quantum initiated proceedings before the International Court of Arbitration in Miami late last year and has since sought US$20 billion from Panama in an arbitration process under a Canada-Panama free trade agreement.

“To even consider the mining issue, the arbitration has to be suspended,” Mulino said. “I am not going to sit at a table in an open forum in Miami when they are suing us for I don’t know how many tens of billions of dollars.”

While Mulino was viewed as the more favorable presidential candidate in Panama’s election last Sunday, headwinds remain for Cobre Panama’s reopening. Analysts expect at least a year’s worth of negotiating between the company and the government before a restart — assuming the mine restarts at all. 

First Quantum shares fell as much as 1.7 per cent in Toronto. The Vancouver-based company declined to comment.

“Whatever the solution is, it does not involve another contract,” Mulino said. “The scheme has to change.”