First Quantum Minerals Ltd. (FQM) announced that its Panamanian subsidiary, Minera Panamá, S.A., has agreed and finalized the draft of a concession contract with the Government of Panamá for the Cobre Panamá mine.

The proposed concession contract meets the objectives outlined by the Panamanian government in January 2022 related to government revenues, environmental protections, and labor standards, FQM said, as well as legal protections necessary to both parties to ensure durability and stability. It is subject to a 30-day public consultation process and approvals by the Panamanian Cabinet, the Comptroller General of the Republic and the National Assembly.

The new agreement will have an initial 20-year term, with a 20-year extension option and additional extensions for the life of the mine.

FQM said Panamá’s Maritime Authority will issue a resolution for Mineria Panamá to resume concentrate loading operations at the Punta Rincón port. Ore processing is expected to resume and restore the mine to full production levels over the next several days.

“After a lengthy and arduous negotiation process, the finalized proposed concession contract outlines the basis for the future of Cobre Panamá for all stakeholders,” said Tristan Pascall, CEO for FQM. “We now have a pathway to continuing our ongoing substantial investments in the country. We now await formal approval and look forward to a long and constructive partnership with the Government of Panamá for many years to come.”

Mineria Panamá will pay $375 million plus an additional $20 million to cover taxes and royalties up to the year-end of 2022. Starting in 2023, Mineria Panamá will pay a minimum of $375 million annually in Government income, comprised of corporate taxes, withholding taxes and a profit-based mineral royalty of 12% to 16%, with downside protections.

Under this new agreement, Panama will reportedly receive approximately 10 times what it received under the previous contract drafted in 1997.