The law currently in force in Panama relating to mining is from 1963 and Martinelli's government believes it contains provisions that hamper investments in the sector. These include prohibiting the granting of mining concessions to foreign governments, which the new law would not retain.

This would facilitate the signing of a potential agreement with South Korea, a major copper consumer, which has already expressed an interest in carrying out copper mining projects in Panama.

Julio Alfaro, writing for Laestrella.com.pa, comments that market prices are predicted to remain at their current high levels for the next few years, which would represent billions of dollars of trade if the contract with the Panamanian state were to go ahead.

Source: laestrella.com.pa

More on this topic

Mining Code Reform in Panama

January 2011

The initiative reforming the Code of Mineral Resources was presented to the National Assembly.

The project, which amended Act 23 of 1963 increases fees, royalties and fines for the mining sector.

The entities responsible for ensuring proper management of the projects will work together with the Commerce Ministry and the National Environmental Authority.

Panama: Royalties Payable by Mining Companies Increase to 4%

July 2010

Modifications planned to the Mining Resources Code also include requirements for environmental studies.

In addition to the increase in royalties from 2% to 4%, the reforms to the Mining Resources Code that the Panamanian government is working on will include the payment of taxes as soon as companies generate revenue, as well as the requirement for environmental impact assessments (EIAs).

Korea Interested in Panamanian Copper

May 2010

Korean companies are interested in the Gnäbe-Buglé field (Cerro Colorado), and the copper mining project by “Minera Panama” in Cocle.

Lee Myung-bak, president of South Korea, will visit Panama in June. He will meet with President Ricardo Martinelli to discuss Korea’s involvement in the country’s mining projects.

Panama Could Change Mining Legislation

March 2010

President Martinelli stated he is willing to modify the present regulation to foster foreign investment.

According to Martinelli the country has big opportunities in mining, and lack of regulation cannot be an issue in taking advantage of them.

“Lee Myung-Bak, Korean President, told us to change the law. We’ll do it, I want the Korean Government, Canadian and U.S. investors to invest in the country”.