TORONTO, March 5 (Reuters) - A dispute between First

Quantum Minerals ( FQVLF ) and Panama over the Canadian company's

flagship copper mine in the Central American nation is an issue

for the people of Panama to decide, a top U.S. official told

Reuters.

In a surprise move late last year, Panama ordered the

closure of Cobre Panama mine, one of the biggest and the newest

copper mines in the world, which accounted for about 40% of

First Quantum's revenue in 2023.

"We have followed the case, and it is an issue for the

Panamanian people to decide... and I know it is a situation

where some communities, not all have expressed opposition," Jose

W. Fernandez, U.S. under secretary for economic growth, energy

and the environment said late on Monday.

Fernandez was responding to Reuters' question whether the

U.S., which has close relations with Canada and Panama, had

taken up the issue of weakening investment climate in the

Central American country.

"The U.S. and Canadian governments have been very supportive

but we do not comment on specific discussions," First Quantum

said in reply to a Reuters query on whether it had asked Canada

or U.S. to intervene in the issue.

The company is seeking $20 billion through international

arbitration from Panama over the mine closure order.

Canadian Trade Minister Mary Nag said in February the

government aims to support First Quantum "as best as it can"

without elaborating.

Panama holds presidential elections in May, and the future

of Cobre Panama mine has emerged as a flash point among

opponents and supporters of the mine.

First Quantum shares have lost about half their value since

the street protests and last month it announced a series of

capital restructuring measures to reduce debt.

Without specifically referring to Panama, Fernandez said

that communities need to be convinced they will benefit from

mining.

On Monday, the U.S. and its thirteen allies announced a

critical minerals partnership to only support projects that

follow high environmental, social and governance standards,

Fernandez said.

But he said the initiative is not an attempt to force

developing countries to choose one country over the other, but

to provide alternative.

Currently over 90% of the world's critical mineral supply

chain is dominated by China, and western countries have

expressed the need to diversify the supply chain in critical

metals.