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Minera will pay more than US$ 390 million for 2022 royalties to Panama

Minera will pay more than US$ 390 million for 2022 royalties to Panama

The subsidiary of the Canadian First Quantum will pay more than US$ 390 million in royalties corresponding to 2022 to the Panamanian State for the exploitation of a large copper mine, in retroactive application of the new concession contract announced on Wednesday by the parties, reported Thursday the Government of Panama.

The company Minera Panama SA (MPSA)a subsidiary of First Quantum, “has already agreed, agreed with the national government, a figure that will exceed 390 million dollars for the payment of royalties owed for the period of the year 2022″, said the Minister of Commerce and Industry (MICI), Federico Alfaro, at a press conference.

He explained that thanks to the new agreement, Panama has gone from having a contract by which “in 2019 the Panamanian State received 30 million dollars and in 2022 it will receive almost US$ 395 million”.

The Government and the mining company announced on Wednesday that they had finally agreed on a contract for the exploitation of the Cobre Panamá mine, the largest in Central America, after more than a year of talks that intensified in recent months when an agreement was not reached. Well, in January 2022 both parties announced an agreement without reaching a signature.

The contract agreed upon by the parties will be subject to a public consultation process for an unspecified period, it must be approved by the Council of Ministers, the Comptroller General and Parliament before its promulgation by the Executive, according to the information official.

The new concession contract, for 20 years that can be extended, establishes an increase in royalties, which goes from “between 2% to 5% to between 12% and 16%”, according to Alfaro said, a minimum income to the State of US$ 375 million, “10 times more” from what was previously contributed by the company, and the payment of taxes exempt until now.

In addition, it restricts the extraction of minerals to only copper and others obtained from it, since previously the mining company subtracted gold and silver based on the fact that the first contract, from 1997, allowed the exploitation of any mineral without distinction.

A fixed amount of tax credit was also agreed for the infrastructures built and not to create new ones.

The new contract included environmental clauses, to reduce the mining impact, and an anti-corruption apparatus, which grants the Panamanian State the power to terminate the concession if they are proven “corrupt acts”.READ

The Supreme Court of Justice of Panama declared unconstitutional in 2017 the 1997 law that endorsed the concession for the exploitation of the Cobre Panamá mine, the largest open-pit mine in Central America. Based on this decision, the Government of President Laurentino Cortizo filed the Negotiation of the new contract.

The Cobre Panamá mine, with an investment of around US$10 billion and 5,279 workers, began exporting copper ore in June 2019.

The operation in Panama represents 50% of First Quantum’s global production and 3.5% of the Panamanian gross domestic product (GDP), according to data from Deutsche Bank cited last week by La Prensa.

Source: EFE

Source: Gestion

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