The operator of one of the world’s largest copper mines has negotiated a new deal to increase fees paid to the Panama government.
The Panama unit of Canadian miner First Quantum Minerals, Minera Panama, says it will pay a minimum of $375 million a year to the government from proceeds of the Cobre Panama mine, which started production in 2019. The government has been negotiating a new contract since September after President Laurentino Cortizo promised to seek a fairer deal with better public benefits, Reuters reports.
This is a big deal and another sign of the strength of the Panama economy. The mine is expected to produce 3.5% of the country’s gross domestic product and provide a key foundation to the economy, along with the Panama Canal. Like the Canal, the mine will provide consistent revenue for the country, helping to fund the slate of infrastructure projects.
At full capacity, the mine is expected to generate more than 300,000 tonnes of copper per year.
In a statement, Minera Panama said the proposed rate was “reasonable.” There were still “safeguards” necessary to make the deal work, but the miner was “optimistic” that a compromise would be achieved.
In a recent statement, First Quantum said the mine produced 331,000 tonnes in 2021, exceeding the initial guidance. The company says it will operate the mine in five phases, with the final phase expected to begin in 2054.