First Quantum Minerals (TSX: FM) has reached a deal with Panama’s government to increase royalty payments at the giant Cobre Panama copper mine, the company’s flagship operation.
The Canadian miner’s subsidiary, Minera Panama, said it considered “reasonable” the $375 million a year-figure the country has asked for. In return, the company asked authorities to guarantee the continuity of operations during the mine’s productive life. The Vancouver-based miner had been in talks with Panama since September last year, a period during which copper prices have traded at record levels.
Sources close to the matter told MINING.COM the Central American nation’s government had proposed a royalty of between 12% and 16% of the mine gross profits, compared to the previously agreed 2% of revenue. They also said the $375-million figure was the minimum annual amount the company would have to pay.
The minister of commerce and industries, Ramón Martínez, said in a press conference last week he also wanted to end a “tax holiday” that allowed First Quantum to put off taxes until de capital costs of building the mine were recouped.
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