The Globe and Mail reports in its Saturday, Jan. 15, edition that on Thursday, Ramon Martinez, Panama's Minister of Commerce and Industries, said the country wants First Quantum Minerals to pay a royalty of 12 per cent to 16 per cent of gross profits from Cobre Panama, compared with the previously agreed 2 per cent of revenue. The Globe's Niall McGee writes that
the Panamanian government is pushing for higher royalties at the company's flagship mine.
First Quantum has been in tax talks with Panama since last September, a period that has seen copper trade near historically high levels. First Quantum operates the Cobre Panama mine, 120 kilometres west of Panama City. Completed in 2019, it is one of the biggest copper complexes in the world, and was constructed at a cost of $6.3-billion (U.S.).
Mr. Martinez also wants to put an end to a tax holiday that allowed First Quantum to put off paying taxes until the capital costs of building the mine were recouped. Cobre Panama is already a huge contributor to the country's economy, employing tens of thousands of people and accounting for 3.5 per cent of GDP. Jefferies analyst Christopher LaFemina calls the magnitude of the proposed royalty hike a "shocker."
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