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Demonstrators take part in a protest against the government contract with Canadian mining company First Quantum, and its subsidiary Minera Panama, in Panama City, Panama on Nov. 24.ROBERTO CISNEROS/AFP/Getty Images

Canada’s First Quantum notified its intent to start arbitration against Panama, the Central American nation’s trade ministry said on Sunday, as the country’s top court considers annulling what opponents call an unfair copper contract.

Panama’s government approved a contract for Canada’s First Quantum to operate the copper Cobre Panama mine on Oct. 20, providing a 20-year mining right with an option to extend for another 20 years to the miner, in return for $375-million in annual revenue to Panama.

Opponents claim the contract favours the miner too much as the mine represents about 5 per cent of the country’s GDP and some 1 per cent of global copper output. Protesters have previously demonstrated over the mine’s environmental and economic impacts and allege corrupt practices in its approval.

A spokesperson for the company confirmed to Reuters the company sent one notification of intent to start arbitration proceedings.

Panama’s trade ministry said in a statement that First Quantum, the miner’s local unit Minera Panama and Franco-Nevada Corporation sent two notifications to an international arbitration centre, adding it was ready to defend the country’s interests. Arbitration is a way of resolving disputes by an impartial person or panel deciding the outcome.

Challenges against the contract’s validity have piled up in Panama’s top court, which started deliberations to rule on several constitutional challenges to it on Friday and is expected to issue a ruling in the coming days.

First Quantum was forced to shut down commercial production this week, following blockades by protesters at a key port that prevented the miner from receiving shipments of essential supplies.

Tensions have been rising around the mine and eight Panama workers of Canadian miner First Quantum were injured when protesters hurled rocks at a bus transporting them, a union leader said earlier on Sunday.

Reuters was not immediately able to contact the protesters.

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