Minera Panamá scenario puts Panama’s investment grade at risk

Members of the Chamber of Commerce, Industries, and Agriculture of Panama expressed their concern about the situation between the Government and the company Minera Panamá by not reaching an agreement to renew the concession contract to exploit the copper mine in Donoso, Colón.

The union made a call to value very well the decisions that are going to be made, and the scenarios that could occur could impact investments.

According to Marcela Galindo, president of the chamber, the current scenario is a country risk at the international level, since this goes beyond what is simply the negotiation of the contract because even the investment grade could be at risk.

She explained that when risk rating agencies issue a rating, they do so based on the certainty and confidence that the country will be able to pay its debts. So, if the contract is not signed, an activity that for next year would mean 3.5% of the country’s Gross Domestic Product will be impacted.

It is still unknown if the company and the Government will reach an agreement in the next few days, however, Minister Doris Zapata assured in AM News that the company has presented some legal tools in the judicial sphere, but affirms that it is without a contract due to the ruling of the Supreme Court issued in 2017.

Minera Panamá indicated last week that, in 2017, they had extended their contract with validity until 2037, which was refuted by President Laurentino Cortizo.

Although the Government has said that they intend to maintain the jobs and it is the company that must meet the payroll, of the workers, more than 5,000, remain uncertain about what will happen.