Morgan & Morgan Legal advised Minera Panama, S.A., in negotiating a Refreshed Concession Agreement with the Government of Panama for the Cobre Panama Project, the largest private investment in the history of Panama.
March, 2023 - Panama City, Panama
Morgan & Morgan Legal acted as lead Panamanian legal counsel to First Quantum Minerals Ltd. (“FQM”) and Minera Panama, S.A. (“MPSA”), a subsidiary of FQM, in all aspects related to the negotiations with the Government of Panama for a refreshed mining concession agreement for the Cobre Panama Project (the “Draft Refreshed Contract”). On March 8, 2023, after a 2 year long, arduous, and complex negotiation process, the parties agreed on the final terms and conditions for a Draft Refreshed Contract.
The finalization of the terms and conditions of the Draft Refreshed Contract is of utmost importance for FQM and the Republic of Panama. The Cobre Panama Project, one of the ten biggest open-pit copper mines in the world, is the result of a US$10 Billion private investment (the largest in the history of Panama). The project has a significant economic impact, accounting for approximately 4.8% of Panama’s Gross Domestic Product (GDP), and for more than 40,000 direct and indirect jobs, according to an expert study. Given its scope, this has been a highly complex matter that involved many commercial and legal issues, including mining, public contracting, administrative, environmental, labor, property, tax and contract law, as well as dispute resolution and arbitration—as two international arbitration processes were also activated during negotiations.
According to the joint press release issued by the Government of Panama and FQM, the Draft Refreshed Contract meets the objectives outlined by the Government in January 2022, related to government revenues, environmental protections, and labor standards, while also providing legal protections necessary to both parties to ensure the durability and stability of the Cobre Panama Project.
The Draft Refreshed Contract will now be subject to a 30-day public consultation process and, thereafter, shall be signed by the parties after it receives the approval of the Panamanian Cabinet Council, after which the Comptroller General of the Republic must review and countersign. Finally, the Draft Refreshed Contract will be presented before the National Assembly of Panama for the issuance of a law approving the contract.
Partner Inocencio Galindo acted as lead legal advisor and negotiator for FQM and MPSA. Mr. Galindo was assisted by partners Aristides Anguizola and Ramón Varela. Founding Partner Juan David Morgan G. also participated in the negotiation process. Partners José Carrizo, Luis Vallarino, Omar Rodríguez, and Mayte Sánchez, from our Litigation Practice, and José Rafael Reyes, from our Tax Practice, also served as counsel in connection to legal matters concerned with such practice areas. Additionally, various associates, including Orlando Tejeira, Alejandro Vásquez, Alejandro Chevalier, and Joy Torres, provided their support in relation to the foregoing. The law firm Aleman, Cordero, Galindo & Lee, acted as Panamanian co-counsel for FQM and MPSA in this matter. The team was led by founding partner Aníbal Galindo, who was assisted by partners Jorge Lee, who managed labor aspects, and Raul Borrell who assisted in contract matters.
