Panama, Canadian group agree to reopen major copper mine

Panama, Canadian group agree to reopen major copper mine

Panama and Canadian giant First Quantum Minerals announced on Wednesday a deal to reopen a major copper mine whose operations had been suspended for three months over a tax dispute.

Work at the Cobre Panama pit, the largest mine in Central America, was shut down in December after the two sides failed to reach an agreement on a new contract, in which Panama wanted to increase by tenfold the amount of tax and royalties First Quantum Minerals paid for the concession.

The two sides said they had “agreed on the final text of the (new) concession contract that will govern the long-term operations of the Cobre Panama Project,” said the statement.

The new, renewable 20-year contract envisages “minimum income” of $375 million for the Panamanian state, some 10 times the amount in the previous contract signed in 1997.

The mine’s closure put at risk the jobs of 8,000 people either employed directly or indirectly in the pit’s operations.

During the near three-month standoff, those affected protested several times in the capital Panama City.

The giant open air mine, some 240 kilometers from Panama City on the Caribbean coast, generates four percent of the country’s GDP and 75 percent of its export revenue.

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