PANAMA CITY, March 14 (Reuters) - First Quantum's

shuttered Cobre Panama mine has instructed its lawyers

to start work to suspend arbitration against Panama, the company

said in an internal memo on Friday.

On Thursday, Panama's President said his government will

allow the export of 120,000 metric tons of copper concentrate

that has been stuck in the shuttered mine for over two years and

also allow restart of the power plant used to run the mine.

Later, the country's commerce ministry said any negotiations

with the miner could only happen if the arbitration case against

Panama was dropped.

"We have instructed our lawyers to meet with the

government's legal team to work on suspending the arbitrations

... leading to a solution that benefits workers, communities,

suppliers and all Panamanians," Manuel Aizpurua, manager of

Cobre Panama said in a memo viewed by Reuters.

First Quantum confirmed the authenticity of the memo.

Shares of the Canadian miner were up 1% on Friday afternoon at

the Toronto Stock Exchange after hitting a two-month high on

Thursday, up 15% after news of the authorization of copper

export.

Panama's government, under Mulino's predecessor, ordered

First Quantum to shut down the open-pit Cobre Panama mine in

late 2023 following protests over environmental concerns. The

move led to questions about maintenance of the massive site and

120,000 metric tons of stockpiled copper concentrate.

Before its shutdown, the mine was one of the world's top

sources of copper, accounting for 1% of global output.

Mulino told a weekly press conference on Thursday morning

that he had authorized removing stranded copper products from

the mine, arguing it was being wasted and that Panama would need

to be reimbursed once the products are processed outside of the

country.

The president said he would review the future of the mine

more broadly as soon as next week.

"The issue of the mine will be approached with great

responsibility and taking into account at all times the national

interest," Mulino said. "We'll start as of next week."