Panama Shuts Down Canadian Copper Mine First Quantum Amid Protests

In a landmark decision, Panama Supreme Court unanimously declared on Tuesday that the 20-year concession for a Canadian copper mine, Cobre Panama, which has been marred by extensive environmental protests, is unconstitutional.

The ruling prompted President Laurentino Cortizo to announce the commencement of a process to close the controversial mine, AP reports.

The contentious Cobre Panama mine faced vehement opposition from environmental activists who contended that its operations posed a severe threat to a forested coastal area and jeopardized local water supplies.

The nine-member court's decision, delivered after four days of deliberation, sparked jubilation among onlookers outside the court, waving Panamanian flags in celebration.

Demonstrator Raisa Banfield expressed relief, stating, "This is what we had been waiting for. The president has to suspend (mine) operations today."

The local subsidiary of Canada's First Quantum Minerals, Minera Panama, operating the mine, acknowledged the court's decision in a released statement.

President Cortizo addressed the nation, revealing that upon formal receipt of the court's decision, the details would be published in the official gazette, initiating "an orderly and safe closure of the mine."

The Protest Against First Quantum

The recent surge of protests was ignited in October following the passage of a law by Panama's Congress approving a new contract with First Quantum for the Cobre Panama mine, BBC noted.

Environmentalists, students, indigenous groups, and labor activists united against the decision.

Protesters, motivated by environmental concerns and opposition to mining, also decried the perceived favoritism towards the Canadian miner, asserting that the contract did not yield sufficient revenue for Panama.

Demonstrators strategically blocked key roads, including the Pan-American highway, causing fuel and food shortages in some regions.

A sea blockade, utilizing boats to impede crucial supplies to the mine, compelled First Quantum, Canada's largest copper producer, to suspend operations.

Despite initial governmental contemplation of legislation to revoke the contract, a backtrack occurred during a National Assembly debate on November 2.

The Supreme Court's declaration of the contract's unconstitutionality presented the final opportunity for opponents to challenge and annul it.

The Canadian government expressed respect for Tuesday's ruling, emphasizing ongoing scrutiny of contract negotiations.

Jean-Pierre J. Godbout, a spokesperson for the government's Global Affairs Department, conveyed hopes for a mutually beneficial solution.

First Quantum's Cobre Panama

Cobre Panama, operational since 2019, contributed significantly to First Quantum's third-quarter revenue of $2.02 billion, generating 112,734 tonnes of copper in the same quarter of 2023, per MINING.COM.

Analysts at BMO Capital Markets assessed that First Quantum is financially equipped to weather short-term challenges, even under a scenario anticipating the mine's closure through 2023 year-end.

BMO analyst Jackie Przybylowski outlined potential financial impacts, indicating that an 80-day halt in 2024 could deplete First Quantum's cash reserves.

Przybylowski emphasized the importance of the government and courts quelling protests to facilitate a swift resumption of mining operations.

Lawyers specializing in mining affairs highlighted the delicate situation faced by both the Panamanian government and First Quantum, given the recent legislation banning new mining concessions and extensions.

This development may complicate negotiations for a new agreement between the parties.

This article is owned by Latin Post.

Written by: Bert Hoover

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