Canada-based mining company First Quantum Minerals, together with its local subsidiary Minera Panamá (MPSA), has signed a draft concession contract with the Government of Panamá to restart the Cobre Panamá mine.

The proposed concession contract will have an initial term of 20 years, with an option to extend the life of mine by additional 20 years.

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.

Under the terms of the concession contract, MPSA will make a $375m payment, along with an additional $20m to cover taxes and royalties up to the year-end of 2022.

MPSA is expected to contribute at least $375m this year (annual minimum contribution) to the government income, comprised of corporate taxes, withholding taxes and a profit-based mineral royalty of 12 to 16%, with downside protections.

The downside protections include a copper price below $3.25 per pound until the end of 2025, and a total tax contribution of less than $300m from 2026 and beyond.

First Quantum Minerals chief executive officer Tristan Pascall said: “After a lengthy and arduous negotiation process, the finalized Proposed Concession Contract outlines the basis for the future of Cobre Panamá for all stakeholders, including the Government, our investors and the country of Panamá.

“I am pleased that we now have a pathway to continuing our ongoing substantial investments in the country. I wish to thank our Panamanian and international employees and their families and our suppliers for their patience and resilience during this time.

“We now await formal approval of the Proposed Concession Contract and look forward to a long and constructive partnership with the Government of Panamá for many years to come.”

Last month, First Quantum and its subsidiary MPSA suspended ore processing operations at the Cobre Panamá mine.

The move is a result of the Panamá Maritime Authority’s refusal to permit copper concentrate loading operations at the Punta Rincón port.

First Quantum aims to bring back nearly 1,000 workers, who were sent on leave while works were paused, and resume ore processing operations in the next few days.

Panama’s Maritime Authority (AMP) issued a resolution for MPSA to resume concentrate loading operations at the Punta Rincón port.