© Reuters. FILE PHOTO: A general view of the Cobre Panama mine owned by Canada’s First Quantum Minerals in Donoso, Panama December 6, 2022. REUTERS/Aris Martinez/File Photo
By Valentin Hilaire and Milagro Vallecillos
PANAMA CITY (Reuters) – The government of Panama and First Quantum Minerals (OTC:) of Canada have agreed on the final text of a contract to operate a key mine, according to a statement signed by both parties.
The new contract guarantees a minimum annual income of $375 million to the Central American government, and will be valid for 20 years with the option to renew for 20 more.
“With this contract, Panama expects to receive about ten times what it was receiving” under the previous contract, the statement added.
First Quantum (NASDAQ:) paid $61 million in royalties to the Panamanian government in 2021, while the Cobre Panama mine posted sales revenue of $3.2 billion for the year, according to company data.
The proposed concession contract is subject to a 30-day public consultation process and approval by the Panamanian Cabinet, the Comptroller General of the Republic and the National Assembly.
In another statement from the Canadian firm, it was indicated that Panama’s maritime authority will issue a resolution on Wednesday for its local subsidiary, Minera Panama, to resume concentrate loading operations at a port. Ore processing is expected to resume in the coming days.
First Quantum suspended ore processing operations at the copper mine on February 23 after a government order suspended its loading permits at the port, limiting its ability to store copper.
“I am pleased that we now have a path to continue our ongoing substantial investments in the country,” First Quantum chief executive Tristan Pascall said in a separate statement from the firm.
