PANAMA CITY, (Reuters) – Panama’s congress yesterday approved a modified version of the government’s contract with a local subsidiary of Canadian miner First Quantum, after extended negotiations over the open-pit copper mine the firm operates and amid anti-mining protests.
The bill was approved in a third and final brief debate with 44 votes in favor, five against, and two abstentions.
The new contract guarantees a minimum annual income of $375 million to the Central American government, and will be effective for 20 years with the option to renew. First Quantum paid $61 million in royalties in 2021.
President Laurentino Cortizo’s administration and the Canadian miner initially agreed on the text of the contract to operate the key Cobre Panama copper mine in March, but it was awaiting the green light from Congress.
The original bill was modified to remove clauses such as one allowing the subsidiary to request airspace restrictions, and another that would have extended its remit beyond copper and its associated minerals to also include gold and silver.
The contract has sparked protests in Panama over the mine’s environmental and economic impacts. Several streets were closed in the Panamanian capital as hundreds of people demonstrated against the Cobre Panama project.
Panamanian economist Felipe Argote criticized the contract on social media, claiming First Quantum took much more from the country economically that it pays in.
Panama’s trade and industry chief, Federico Alfaro, said the company’s remit is strictly limited to copper in an area of 12,955 hectares, and the contract’s approval sends a positive message to future investors.
The contract will now pass to be signed by the president, whose party has supported it.