Portugal Colonial - Panama, Canadian group agree to reopen major copper mine

Work at the Cobre Panama pit, the largest mine in Central America, was shut down in December after the two sides failed to reach an agreement on a new contract, in which Panama wanted to increase by tenfold the amount of tax and royalties First Quantum Minerals paid for the concession.

The two sides said they had "agreed on the final text of the (new) concession contract that will govern the long-term operations of the Cobre Panama Project," said the statement.

The new, renewable 20-year contract envisages "minimum income" of $375 million for the Panamanian state, some 10 times the amount in the previous contract signed in 1997.

The mine's closure put at risk the jobs of 8,000 people either employed directly or indirectly in the pit's operations.

During the near three-month standoff, those affected protested several times in the capital Panama City.

The giant open air mine, some 240 kilometers from Panama City on the Caribbean coast, generates four percent of the country's GDP and 75 percent of its export revenue.

President Laurentino Cortizo had ordered a suspension of the mine's activities on December 15 and then also closed the adjacent port on February 3.

Negotiations had dragged on for about a year.

"We hope to have a long and constructive association with Panama in the years ahead," said First Quantum general manager Tristan Pascall, quoted in the statement.

"The most important thing is that this contract is beneficial for Panama and Panamanians," said Business and Industry Minister Alfaro Boyd, who led negotiations on behalf of the government.

The new contract must now be ratified by Congress before also going through other formalities, such as a period of citizen consultation and receiving the backing of Cortizo's cabinet.

First Quantum, one of the largest copper miners in the world, began commercial copper production at the site in Donoso in 2019, through a company called Minera Panama.

It has spent $10 billion on earthworks, construction buildings to house more than 7,000 employees, the purchase of heavy machinery, a power plant, a port for deep-draft merchant ships, access roads, and re-forestation plans.

The mine is the biggest in Central America, producing 300,000 tons of copper concentrate per year, according to First Quantum's manager in Panama, Keith Green.

The company ran into trouble in 2017 when Panama's Supreme Court, acting on a suit filed by environmental groups, said the mining contract it had was unconstitutional.

P.Cavaco--PC