Reopening of the Mine in Panama will help Diversify State Revenues
Although the future of the project is Panama’s sole responsibility, experts praised the benefits this industry provides to the economy.
The possible reopening of the copper mine in Donoso, according to Renzo Merino, senior vice president of sovereign credit and risk at Moody’s Rating, will contribute to the diversification of government revenues, economic reactivation, increased exports and the generation of more formal jobs not only in the project but also in the activities associated with it, facilitating its accessibility to bank loans, therefore, they closely observe the development of the issue in the country. He stated that he understands that the rejection of the mining issue during the previous administration was linked to political issues. Therefore, implementing distinct processes regarding environmental sustainability and transparency are key to gaining public support for these types of projects.
Although he acknowledged that the future of the mine is Panama’s sole responsibility, the expert emphasized the benefits this industry offers to the economy through its environmental management. He indicated that the risk rating agency remains vigilant about the decision Panamanians make regarding the mining issue based on the results of the comprehensive audit requested by the Executive Branch. Moody’s Ratings maintains that the mine’s reopening will make the country more resilient to potential shocks, facilitating its integration into the global market , since minerals, specifically copper, have become a key issue in the transformation of the global economic context.
According to Eric Molino Ferrer, director of financial planning and strategic services, the country has lost $1.7 billion in revenue in the last year: $250 million in salary payments, $500 million in taxes, and nearly $1 billion in supplier payments—resources that could be provided by the mining industry. He reiterated that the creation of direct and indirect jobs from the mine is “unquestionable,” so the public, instead of focusing on the why, should focus on the how. “The rejection that has occurred isn’t necessarily related to the project itself, because the positive impact is recognized, so accountability for environmental programs must be guaranteed,” he said. He argued that the number of jobs generated by this project will be difficult to achieve in the country in the short term.
Therefore, the project’s authorship is so important to ensure compliance with international environmental conservation standards. Recently, President José Raúl Mulino, during his trip to Japan, announced that the possibility of recovering the mine is being analyzed, a decision that has been supported by the general manager of the National Bank of Panama, Javier Carrizo Esquivel, who, during his participation in the forum organized by Moody’s, stated that the issue of the mine “is coming soon.” Analysts praised the executive branch’s efforts to address issues neglected by previous administrations, despite the political cost. These decisions are not easy, but they are necessary to boost the economy.
