economy

Copper branch of mining giant splits up

CARLOS LEMOS/LA PRENSA

divided: Disagreements among shareholders of Minera Petaquilla caused Canadian partners to change the company’s name and buy out the 26 percent owned by Panamanian counterparts.1095497

A rift within mining giant Minera Petaquilla led Canadian partners to split from Panamanian partners last week, changing the company’s name to Minera Panamá, and buying 26 percent of the original company’s shares from the Panamanian partners for $44.9 million.

Representatives of the Minera Panamá would not comment about the nature of the disagreement, but Panamanian shareholder Richard Fifer explained that the group is attempting to repair the damage caused to its image because of the Petaquilla project and its former partners.

In addition to the $44.9 million, the Panamanian partners will retain their rights to Petaquilla Gold, another branch of the original company occupied with building a gold mine on 160 acres in the Donosí district of the Colón province.

The government received no part of the profits of the split off, though it owns the land granted in a concession to Minera Panamá, a copper mining group jointly owned by Canadian companies INMET Mining and Teck Cominco, with 76 percent and 26 percent control, respectively.

Vice Ministro de Comercio Interior Manuel José Paredes said that the government has not been notified of the transfer of shares between partners of the company, but admitted that mining concession contracts permit such an exchange.

He also indicated that the state did not receive dividends from the transaction because it has no legal rights to it.

“It’s as if the state were to have the right to receive money every time we raise the shares of Cable & Wireless or Manzanillo International,” he explained.

Nevertheless, Paredes said that the Ministerio de Comercio e Industrias still awaits notification of all changes that have taken place within Minera Panamá.

Meanwhile, David Baril, president of Minera Panamá, reported construction on the copper mine will likely start toward the end of 2009, a project still subject to the government’s approval of the Environmental Impact Assessment (EIA), for which it has paid $8 million.

Baril said that the proposed copper mine, estimated to affect 3,000 hectares of forest in the province of Colón, will create 1,300 jobs over the next 23 years that the company plans to be operating at the site. The project’s budget for this year alone is $65 million, he added.