Minera Panamá accepts government proposal

The company Minera Panamá, of the Canadian First Quantum Mineral (FQM), has accepted the proposal put forward by the National Government which gave the mining giant until Monday to respond.

“Minera Panama understands the general terms proposed by the National Government of Panama while considering reasonable a minimum annual contribution of $375 million balboas by the Cobre Panama mine,” the company said in a press release.

Minera Panama requested the protections required to safeguard the continuity of the project.

“We accept the proposal of the National Government while requesting that the necessary protections be provided in order to safeguard the continuity of the operation during the term of the project,” the company details.

 Minera Panama expressed that they feel “optimistic that the achievement of a commitment that is mutually consistent with what is stated in the proposal received from the Panamanian government on January 13 can be announced.”

The proposal
“The current contract has a 2% royalty on sales (…) we wanted to move to a royalty system based on the company’s profits and (…) therefore a 12% structure was proposed. 16% royalty based on gross profits,” said the Minister of Commerce and Industry (MICI), Ramón Martínez, last Thursday, January 13.

The Government’s proposal also includes that the company pay an income tax (ISLR) at a rate of 25%, something from which it has been exempt until now.

“The Income Tax that to this day the Minera Panama company does not pay, the proposal is that this 25% tax has to be paid by the company, as well as the withholding of payments made by the company for interest, dividends and payments of services abroad,” explained Martínez.

“However, and in order to guarantee that the Panamanian State receives a guaranteed minimum amount in the course or in the life of this contract, the company has been asked to make a minimum tax contribution of 375 million dollars each year. The only exception is if the price of copper plummets below $2.75 a pound,” the trade minister added.