LatinNews Daily - 09 March 2023

In brief: Panama and FQM announce deal over major copper mine

* Panama’s government led by President Laurentino Cortizo and Minera Panamá S.A. (MPSA), the subsidiary of Canadian mining company First Quantum Minerals (FQM), have announced that a draft of a concession contract has been agreed and finalised regarding the copper mine Cobre Panamá. The two sides have been locked in a dispute since December 2022 when talks over a new contract unravelled, casting doubt over the future of the project, which is Panama’s biggest single private foreign investment. According to FQM, the proposed concession contract meets the objectives outlined by the government in January 2022 related to “government revenues, environmental protections and labour standards”. It adds that Panama’s maritime authority (AMP) has confirmed it will issue a resolution for MPSA to resume activities at the mine’s port, Punta Rincón, which were were suspended last month. FMQ outlines that provisions of the proposed contract will include, among other things: payment by MPSA of US$375m plus an additional US$20m to cover taxes and royalties up to the end of 2022; and payment by MPSA starting in 2023 of an annual minimum contribution of US$375m in government income, comprised of corporate taxes, withholding taxes, and a profit-based mineral royalty of 12% to 16%. It also includes downside protections to the annual minimum contribution. The draft contract, which will have an initial 20-year term, with a 20-year extension option, is subject to a 30-day public consultation process and approvals by the Panamanian cabinet, the country’s comptroller general, and the national assembly.

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