Panama President Vows to Close First Quantum Copper Mine After Court Ruling

The president of Panama, Laurentino Cortizo, promised this Tuesday a closure process “neat and safe” of the largest copper mine in Central Americaof Canadian capital, after the Supreme Court declared “unconstitutional” your concession contract.

The approval of the mining contract by Congress, on October 20, unleashed the largest protests in Panama since the fall of dictator Manuel Noriega in 1989, semi-paralyzing the country for more than a month and with losses exceeding more than US$ 1.7 billion. according to business unions.

“As soon as formal communication of the ruling declaring unconstitutional is received“the mining contract”The transition process will begin for an orderly and safe closure of the mine“, said Cortizo in a message to the country.

“Due to the impact on Panamanian society of the closure process“every decision that is made”It has to be attended to in a responsible, inclusive and participatory manner”he added.

The Supreme Court declared this Tuesday “unconstitutional” the contract between the Panamanian government and the Canadian mining company First Quantum Minerals (FQM) to operate the mine for 40 years, which has about 50,000 direct and indirect workers.

After the announcement, celebrations broke out in different parts of the country and road blocks began to be lifted.

Hundreds of Panamanians celebrated the ruling, issued on the day Panama commemorates its independence from Spain, on one of the capital’s main avenues.

“It is a transcendental ruling, not only for the future of Panama, but also for our defense in international courts. No foreign company can come here to shake their millions at us and say that because they invest they can do whatever they want.“environmentalist Raisa Banfield told AFP.

“This is like having won the World Cup (soccer), this is the triumph of the Panamanian people“Katherine Tuñón, 38, told AFP while celebrating after hearing the ruling.

However, the leader of the Suntracs construction union, Saúl Méndez, warned that the protests will continue “until closing” of the mine.

The multinational said in a statement that “from the beginning“has operated”with transparency and strict adherence to Panamanian legislation”.

The company assured that “has also heard the popular cry”. For this reason, he added, they will remain “attentive to constructive dialogue that allows us to define a course of action that satisfies that cry.” and “legitimate interests and expectations” from the investment.

For its part, the mine workers union asked in a statement “to the authorities that fulfill their role of guaranteeing our jobs or, failing that, the payment of labor benefits if applicable.”.

Mining moratorium

The protest erupted after Congress approved the new contract, which was initialed after the Supreme Court declared the original 1997 agreement unconstitutional in 2017.

FQM It argues that the mine generates 50,000 jobs, contributes 5% of the GDP and that the contract includes the payment of annual royalties of 375 million dollars, ten times more than the initial agreement.

Since 2019, the mine has produced about 300,000 tons of copper concentrate annually, which represents 75% of Panamanian exports. It also has about 2,500 suppliers in the country, who sell merchandise for 900 million dollars annually.

Environmentalists say the mine severely damages the environment. The American actor Leonardo DiCaprio and the Swedish activist Greta Thunberg have made reference to the Panamanian protests on their social networks.

Trying to minimize discontent, Congress approved an indefinite suspension of mining concessions and left the future of the contract in the hands of the Supreme Court.

And now that?

The company, which has invested more than US$10 billion in Panama, previously notified the government of its “intention” of “file arbitration claims”, under the protection of the Free Trade Agreement between Panama and Canada of 2013.

Some experts believe that it will be easier for the government to defend its position after the ruling, since it will be able to claim that the ruling led it to break the contract.

“Of course one has more strength with a failure“Lawyer Ernesto Cedeño told AFP.

The Chamber of Commerce called to accept the ruling and prepare in a consensual and technical manner to “an orderly closure” of the mine.

Felipe Chapman, of the economic advisory firm Indesa, told AFP that “If it (the mine) closes, its contribution to the size of the GDP is lost, which will take a few years to recover, as are jobs and tax revenue.”, but pointed out that the country can promote other sectors to replace mining.