SNC Lavalin gets stiffed on Cobre Panama mine build
Canadian engineering firm says the takeover of Inmet by First Quantum Minerals scuttles the deal
MONTREAL—Canadian engineering giant SNC-Lavalin Group Inc. doesn’t expect to complete its contract on the Cobre Panama project following a recent $5.1-billion takeover of Inmet Mining Corp. by First Quantum Minerals.
SNC-Lavalin said construction of Inmet’s copper mine has been suspended by its subsidiary, Minera Panama S.A.
It expects the remainder of the work will now be taken over by First Quantum, which typically directs and executes projects on an internal basis.
Inmet had signed a deal last year with a joint venture led by SNC-Lavalin for the first phase of the planning and construction of a process plant at the Cobre Panama project.
The value of the work SNC-Lavalin was contracted to do was estimated to be worth approximately $120 million, which the company said will be debooked from its backlog in the first quarter of 2013.
Inmet, which has mining operations in Turkey, Spain and Finland, owns 80 per cent of the $6.2-billion Cobre Panama project, with the remainder owned by Korea Panama Mining Corp.