The contract covers the operations of a local subsidiary of Canadian mining company First Quantum Minerals at the Cobre Panama mine.
The bill was overwhelmingly approved by lawmakers in Congress on Friday. President Laurentino Cortizo’s approval, made official in the government’s official gazette, was the final step in giving the contract the green light.
The terms of the new contract guarantee the Panamanian government a minimum of $375 million in annual revenues and will run for 20 years with an option to renew.
First Quantum will pay $61 million in royalties in 2021.
Cortizo’s administration and the Canadian miner initially agreed on the text of a renewed contract for the Cobre Panama project in March. But approval proved elusive, with some lawmakers demanding changes to certain clauses.
An earlier version of the contract was amended to remove clauses such as one allowing the subsidiary to request airspace restrictions and another that would have extended its remit beyond copper and related minerals to include gold and silver.
The contract negotiations sparked local protests over the environmental and economic impact of the mine. Several streets in the Panamanian capital were closed as hundreds of people demonstrated against the massive open-pit mine.
Felipe Argote, an economist, criticised the contract on social media, claiming that First Quantum would take much more from the country economically than it would contribute.
Trade and Industry Minister Federico Alfaro said the company’s scope was limited to copper and related minerals, not precious metals, in an area of about 13,000 hectares.
He said the final approval of the contract would send a positive message to future investors.