Panama issues ultimatum to Canadian copper giant after four months of talks

 
1,636Views 32Comments Posted 13/01/2022

 

After 15 meetings the Panama government has issued an ultimatum to Minera Panama to respond no later than January 17  said Minister of Commerce, Ramón Martínez on Thursday, January 13.

There are already four months of negotiations and progress has been made in environmental aspects, since President, Laurentino Cortizo In addition, he spoke of the advances in labor issues that give the possibility for more jobs in the Cobre Panamá project.

He said that the economic part has taken too long and the limits have been reached and for the sake of transparency, he presented the proposal discussed with the company and that to date no response has been received.

According to the minister, the proposal begins with royalties and as everyone knows, the current contract has a 2% royalty on sales and with this scheme, they have wanted to move to a system that is based on the company's profits and that gives the opportunity for the country to share those profits and therefore a structure of 12 to 16% royalties was proposed based on gross profits.

Part of the proposal is the Income Tax, which to this day Minera does not pay.

In this sense, he said that from day one this 25% tax must be collected and paid by the company. In addition, the withholding of payments made by the company for interest, dividends, and payments of services abroad is proposed.

Martínez argued that this scheme, with the current price of copper, should give the country a figure greater than 400 million dollars.

The minister was also emphatic in saying that in order to guarantee that the Panamanian State receives a guaranteed minimum amount during the course or life of the contract, the company has

been asked to make a minimum financial contribution of $375 million  each year, with the exception  if the price of copper collapses to less than $2.75 dollars a pound, because the operation of the company and employment would be put at risk