Panama orders suspenion of Canadian mining giant

The Cabinet Council has instructed the Minister of Commerce and Industry to suspend the operations of Minera Panama said President Laurentino Cortizo in a report to the nation on Friday, December 15.

Cortizo explained that the Cabinet Council instructed the Minister to execute a preservation and safety management plan that goes in the direction of the care and maintenance of the mine.

The Minister of the Environment was also instructed to continue with the control and supervision of environmental efforts at the site. And to the Minister of Labor, to take measures to protect sources of employment and guarantee employment benefits.”All Panamanians, rest assured that the government will seek the best options to guarantee the sustained maintenance of the mine through a contract that establishes fair benefits for the parties,” president. One year after the talks began between the Minera Panamá company (a subsidiary of Canadian mining giant First Quantum and the government to reach a contract that would grant a legal basis to the operation of the Cobre Panamá mine, located in Donoso, Colón, the reached an agreement.

After the decision of the Supreme Court) of December 21, 2017, which established the unconstitutionality of the Law 9 contract of February 25, 1997, became final in December 2021, and negotiations intensified.

In January 2022, the president had announced an agreement that required the mining company to guarantee a minimum annual royalty payment of $375 million, improve worker conditions, provide greater protections for the environment, and promote the well-being of local communities. through social works. Then, in a public statement, the mining company considered the royalty that it had to pay to the Panamanian State reasonable but later retracted it.

“The company did not comply with the agreed commitments…”, said the president.

On the night of December 14, when the deadline to reach a deal was reached the mining company showed “unreasonable” demands, which instead of bringing positions closer, pushed them away the government said. It refused to accept the draft contract offered by the Panamanian State, which respected the conditions of the January 2022 agreement. On the contrary, it insisted on undermining royalties and demanded tax exemptions and tax credits, a position that the government considered “ regrettable”.