PANAMA CITY - Panama will bar First Quantum from extracting copper during the closure of the mine it lost the rights to run last year, the country's Trade Minister Jorge Rivera Staff told Reuters, adding that new ways need to be found to finance the mine's shutdown.

Miners around the world tend to keep mining during closure processes as they use those profits to finance shutdowns, but such a move is off the table in the case of Cobre Panama, Rivera Staff said in an interview on Thursday.

The decision to strip Canada's First Quantum from its contract, which accounted for about 40% of its revenue last year, came amid nationwide protests that also led authorities to ban to all metal mining activities.

"There are two alternatives to finance the closure process. One is for the company to pay for it, if it continues to handle the shutdown, and another is for the government to cover it. Where would the funds come from? That is part of the discussions we are having," Rivera Staff said.

Panamanians go to the polls to elect a new president on May 5, meaning the next government will likely decide who will pay the estimated $800 million cost of shuttering the mine.

Panama last year ordered the closure of the Cobre Panama mine, which accounted for about 1% of global copper output, following a top court ruling declaring its contract unconstitutional.

Traders and investors are closely watching the election outcome to see if a new government could bring back mining but Rivera Staff said it could take months or even years to see any shift in Panamanians' current strong opposition to mining.

The trade minister extended an invitation to all eight of the country's Presidential candidates for talks on the Cobre Panama mine closure plan, but only the teams of three participated. The others argued lack of space in their agendas, Rivera Staff said.

Panama and the Canadian miner are working together to draft a plan - to be made public in the next two weeks - for the mine to be in "care and maintenance mode" while details on the final closure are sorted out, Rivera Staff said.

Current plans call for First Quantum to handle the closure process but the country could choose an alternative if better terms were offered, the minister said, adding the shutdown is expected to take at least eight years.

Another sticking point between Panama and First Quantum revolves around who owns the 121,000 tons of copper concentrate stored in the mine.

First Quantum said last week it believed that it was going to be able to extract it after the election, but Rivera Staff said the government has yet to decide who owns it.

Panama is working to find out if the copper concentrate, worth about $200 million, was mined before or after the ruling invalidating the contract, Staff said.

First Quantum has opened one commercial arbitration process against Panama over the voided contract, but another four arbitrations, focused on investments, are in their first stages.

Mandatory pre-arbitration talks have ended in at least two of the cases, Rivera Staff said, though First Quantum has yet to move further.

"I imagine they are waiting to see what happens in Sunday's election," he said.

Rating agencies have warned that Panama's economy could be severely affected if the country loses one or more of the arbitrations and is forced to pay high penalties.