Panama’s tax dispute with First Quantum Minerals Ltd. over a giant copper mine underscores increasing political risks mining companies face in some regions, according to fellow Canadian metals producer Alamos Gold Inc.
“There are too many difficulties in emerging markets right now,” chief executive officer John McCluskey said in a Monday interview. “Something goes wrong, and the government decides it wants to jack up your tax rate, or just make an accusation that you suddenly owe $200 million or more in back taxes, or something along those lines. I mean, companies have faced that kind of thing.”
McCluskey, 63, has firsthand experience with such political risks. Back in 2019, Turkey’s government declined to renew Alamos Gold’s permits for a project in the country, leading the CEO to shutter the company’s Turkish operations and then take the government to court for “unfair and inequitable treatment.” Four years later, McCluskey said he’s still pursuing a $1 billion claim in an international court.
The fallout in Turkey has left the 20-year-old company with only North American assets. Alamos owns two gold mines in Canada and one in Mexico, where “you can actually go to sleep at night knowing your assets are secure,” McCluskey said. The company’s shares have risen 60% in the past year.
Panama’s feud with First Quantum has escalated in recent weeks, with the Central American government starting a negative ad campaign against the Vancouver-based company on Twitter and suspending its access to shipping on Monday.
(By Jacob Lorinc)