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The Panama Government has set 14 December 2022 as the final date for Canada’s First Quantum Minerals to sign the contract to continue operations of Cobre Panama copper mine.

First Quantum started negotiations with the Panama Ministry of Commerce and Industries in September 2021 to renew the mine contract in compliance with Panamanian law and international standards on mining concessions.

In January 2022, the firm agreed to increase its royalty payments to $375m a year for the Cobre Panama mine.

As part of that proposal, First Quantum also accepted to provide between 12% and 16% of its gross profit to the government. This would replace the previous revenue royalty of 2%.

Panama Commerce and Industry minister Federico Alfaro said the firm is due to sign a new contract by 14 December.

Alfaro said: “The future of Cobre Panama is critical to the people of Panama, its workers, and to First Quantum.

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“We had a serious and frank conversation with First Quantum (and) we were very clear about the required path forward for the execution of the contract.”

Claimed to be one of the world’s largest copper mines, the Cobre Panamá mine also has reserves of gold, silver, and molybdenum.

Located in Colón Province, around 120km west of Panamá City, the Cobre Panamá comprises a mine, a processing plant, a 300MW power plant, and a dedicated port.

Operated by First Quantum Minerals subsidiary Minera Panamá, the project started commercial export production in 2019.