The following update on the Cobre Panamá mine, which is run by its subsidiary Minera Panamá, S.A., was released by First Quantum Minerals Ltd. on January 10th, 2022.
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The Cobre Panamá mine’s long-term future is still being discussed by First Quantum, MPSA, and the Panama government. The company is still prepared to come to a mutually beneficial agreement.
First Quantum and MPSA are willing to meet and, in some cases, go beyond the government’s January 2022 revenue, environmental protection, and labor standard goals.
This includes a minimum of US$375 million in annual government revenue, which is made up of corporate taxes and a profit-based mineral royalty of 12% to 16% with downside safeguards that support the government’s position.
First Quantum reckons the minimum payment structure is a benefit to the government that is exceptional and unheard of in the mining sector. The government would receive revenue that is several times higher under the recently proposed profit-based royalty than under the existing contract and the current Panamá Mining Code.
If not the highest royalty rates in the Americas, the proposed rates would be among the highest paid by copper miners.
We are ready to reach a mutually beneficial agreement that provides the legal certainty that we need to help promote the sustainable development of Panamá, safeguard our thriving Panamanian workforce and protect our investment.
Tristan Pascall, Chief Executive Officer, First Quantum Minerals Ltd.
Pascall added “First Quantum and its predecessor have invested at least US$10 billion to build one of the world’s largest, safest, and most advanced copper mines. This investment was enabled by the assurance and expectation that Panamá supported the project through a long-standing, comprehensive agreement from 1997 that covered taxation, including mining royalties, and other arrangements.”
“Since we became involved, we have met all of our obligations and Cobre Panamá is now a business that provides benefits to all Panamanians. We are doing everything possible to support our employees and their families, local communities, the country of Panamá and the Company’s investors and stakeholders,” added Pascall.
As was previously stated, MPSA is taking a number of actions to address the National Directorate of Mineral Resources of the Ministry of Commerce and Industries resolution requiring MPSA to halt commercial operations at Cobre Panamá.
The government will receive a plan from MPSA to put the mine under “care and maintenance” for review and comment. The timing and effects of any care and maintenance program implemented by the Ministry are still unknown at this time. In the interim, Cobre Panamá’s operations continue as usual with no current interruption to production.
On Tuesday, January 10th, 2023, at 8:30 am (EST), the company hosted a conference call and webcast to discuss developments in Panama regarding the status of the Cobre Panamá mine.
Source: http://www.first-quantum.com/