Dec 1 (Reuters) - First Quantum Minerals will suspend its current-year production outlook for the Cobre mine in Panama and has initiated international arbitration over a contested contract with the country's government, the miner said on Friday.

The lucrative Cobre Panama copper mine has sparked public anger in the country, starting as small, environmental protests that have morphed into bigger demonstrations against the government on charges that the contract was too generous.

The contract, agreed between the company and the Panama government in October, provided First Quantum a 20-year mining right with an option to extend for another 20 years, in return for $375 million in annual revenue to Panama.

On Tuesday, Panama President Laurentino Cortizo said the Cobre Panama mine would be shut down, hours after the country's Supreme Court declared its contract unconstitutional.

First Quantum said on Friday its unit had started arbitration before the International Court of Arbitration to protect its rights under the 2023 concession agreement that the government of Panama agreed to earlier this year.

It provides for arbitration in Miami, Florida. (Reporting by Tanay Dhumal in Bengaluru; Editing by Devika Syamnath)