- Minera Panamá, a subsidiary of the Canadian company First Quantum Minerals (FQM), will have to shut down the Cobre Panamá mine after the country’s highest court ruled the concession contract unconstitutional.
- One of the challenges to the constitutionality of the contract focused on tendering, a process in which companies are invited to bid on a project, ensuring a fair market and competition.
- Last year, the mine produced over 86,000 tons of copper, around 1% of the world’s total production and 5% of Panama’s GDP. But the operation is also exacerbating a current drought and threatening migratory birds, protestors said.
The Supreme Court in Panama ruled that the contract for the country’s largest copper mine is unconstitutional, requiring it to shut down.
Minera Panamá, a subsidiary of the Canadian company First Quantum Minerals (FQM), will have to close the Cobre Panamá mine after the country’s highest court unanimously ruled that the terms of its contract were unconstitutional. The decision comes amid nationwide protests that blocked roads and shipping routes as Panamanians fought back against expansion of the mining sector.
“The Panamanian people have spoken,” said Kherson Ruiz, executive director of the Sustainable Development Foundation. “The people have spoken and expressed that they don’t want more mines, that they want sustainable economic development and have no intention of destroying the country for profit.”
Last year, the mine produced over 86,000 tons of copper, around 1% of the world’s total production and 5% of Panama’s GDP. It employs more than 2% of the country’s workforce and purchases around $20 million in supplies from local businesses every week, the company said.
The government renegotiated a contract with Minera Panamá in October that increased mining royalties for the country — at least $375 million annually. In 2021, it paid only $61 million in royalties. The contract also extended the mining concession another 20 years, sparking the protests.
One of the challenges to the constitutionality of the contract focused on tendering, a process in which companies are invited to bid on a project, ensuring a fair market and competition. If tendering wasn’t carried out before the government awarded the contract to Minera Panamá, the concession would be unconstitutional.
“Panama is an example of the growing desire of Mesoamerican peoples to protect biodiversity and develop sustainable economic alternatives that move away from extractive industry and deforestation,” Esteban Brenes-Mora, Re:wild senior Mesoamerica associate, said in a statement. “The people of Panama see the value of nature and are standing up for their rights and the rights of their wildlife and wildlands.”
The mining concession is located in the province of Colón near the Caribbean coast, where several rivers converge and supply the region with freshwater. Minera Panamá’s use — as well as alleged contamination — of the water was hurting local ecosystems, protesters said.
Minera Panamá didn’t respond to a request for comment for this story.
The concession impedes on the habitat of emblematic species like the Geminis’ poison dart frog (Andinobates geminisae) as well as the endangered great green macaw (Ara ambiguus), the bare-necked umbrellabird (Cephalopterus glabricollis) and Panama’s national bird, the harpy eagle (Harpia harpyja). The area is an important corridor for many migratory birds that travel back and forth from North America.
The mine was also exacerbating the country’s drought, critics said. The warmer, drier weather of El Niño has reduced reservoir levels in the Panama Canal and forced officials to cut back transit by as much as 50%, threatening global trade. Critics said the mine is using water that could be going to the canal.
Blockades at a port where mining materials and supplies arrive forced Minera Panamá to reduce its operations to one mineral processing train earlier this month. The company also said it expected to run out of supplies to a power plant.
Under increasing pressure from protesters, President Laurentino Cortizo attempted to put the fate of the mining contract into a national referendum earlier this year. However, the constitution doesn’t allow contracts to be voted on that way.
The National Assembly also passed a law extending a moratorium on all mining concessions in the country, including ones that were previously waiting approval. With the pending closure of the Minera Panamá mine, the country moves closer to being free of mining activity, or at least legal mining activity.
Illegal gold mining in places like Darien National Park continues to be a threat to protected areas and rainforests. Earlier this year, Panama and Colombia agreed to step up military operations to combat criminal groups involved in illegal mining.
“I think the next step for the movement is for all Panamanians to fight against the illegal mining that exists in places like Darien,” said Jonathan González Quiel, activist and founder of Club Qgis Panamá, a conservation mapping group.
Banner image: The Donoso District in Colón Province, where the copper mine is located. Photo courtesy of Re:Wild
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