Panama to shut one of world’s largest copper mines after court ruling
Panama’s President Laurentino Cortizo ordered the closure of one of the world’s largest copper mines, First Quantum’s Cobre Panamá Mine, after Panama’s Supreme Court ruled the mine’s contract was unconstitutional.
In a televised interview, Cortizo said "the orderly and safe closure of the mine" would begin as soon as the Supreme Court's ruling was formerly published in the official gazette.”
The Financial Times reported that the court’s unanimous vote against the contract for the Cobre Panamá Mine — which accounts for more than 1 percent of global copper output — came after analysts and investors had begun to reassess Panama’s business-friendly image.
“Today it was clear that the administration of justice is the backbone of democracy,” Cortizo wrote on X.
First Quantum Minerals, which says it has invested $10 billion in the project, said it would make further comment when additional details of the ruling were made public.
First Quantum said it is reviewing the ruling and continues to reserve all its local and international legal rights in regards to developments in Panama.
“Due to the continued illegal blockades at the Punta Rincón port and roads to the site, the Cobre Panama mine has suspended commercial production and is applying a program of Preservation and Safe Maintenance to ensure the compliance and environmental integrity of the site, preservation of the assets, and safe maintenance of the plant and facilities. The security and safety of the workforce at Cobre Panama remains a priority for the Company,” First Quantum said in a statement.
The contract that was 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 percent 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 toward 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 upward by news that workers at the Las Bambas Mine in Peru, which is owned by China-backed MMG and produces about 2 percent 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.
Photo credit: First Quantum Minerals