• Mon. Mar 4th, 2024

Panama to shut one of world’s largest copper mines after court ruling


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Panama will shut one of the world’s largest copper mines, its president said on Tuesday, after the country’s Supreme Court struck down a Canadian company’s contract to operate it amid large protests.

The court’s unanimous vote against the contract for the Cobre Panamá mine — which accounts for more than 1 per cent of global copper output — came after analysts and investors had begun to reassess Panama’s business-friendly image.

Activists who opposed the project were elated by the ruling. The country’s president, Laurentino Cortizo, said later on Tuesday that once the decision was published in the official gazette the orderly and secure closure of the mine would begin.

“Today it was clear that the administration of justice is the backbone of democracy,” he wrote on X.

The mine’s operator First Quantum Minerals, which says it has invested $10bn in the project, said on Tuesday it would make further comment when additional details of the ruling were made public.

Juan Carlos Monterrey, executive director of non-profit group Geoversity and former lead climate negotiator for Panama, said: “This ruling means the mine has no legal grounds for its operations. Therefore, they must cease.” He added: “Panama remains open for business — green business.”

The new contract struck down by the court was approved by Congress in late October, sparking widespread protests that have shut major roads in the country. 

Public anger over the huge mine — which accounts for about 5 per cent of the country’s gross domestic product — snowballed over issues ranging from environmental damage to perceived corruption.

The government said this week that First Quantum Minerals had taken the first step towards international arbitration over protesters’ blockades, which have severely disrupted operations.

The original concession for the mine, given out in the 1990s, was disputed because it lacked an open bidding process. First Quantum Minerals took a majority stake in the project in 2013, and the mine now accounts for about half of its annual production.

In 2017 Panama’s Supreme Court declared the original law that underpinned the concession unconstitutional but negotiations for a new contract did not get under way until appeals were exhausted. 

The protests have come amid a growing backlash against the mining industry throughout Latin America. Copper prices were driven upwards on Tuesday by news that workers at the Las Bambas mine in Peru, which is owned by China-backed MMG and produces about 2 per cent of global copper supply, had begun an indefinite strike over a profit-sharing dispute.

Panama will hold presidential elections in May, with former president Ricardo Martinelli leading the polls. But he also faces a 10-year prison sentence for money laundering, which may make him ineligible to run.

Additional reporting by Joe Daniels in Bogotá



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