Mining giant and Panama government at loggerheads

Negotiations between the Panamanian government and the Minera Panamá company, a subsidiary of the Canadian First Quantum, are at their peak on Thursday,  February 23 the first day of the complete cessation of activities at the Donoso mine.

The Ministry of Commerce and Industries (Mici) stressed that there is no concession contract in force because the mining company has refused to endorse the agreement agreed on January 17, 2022, which implied an annual contribution of at least $375 million to the State. Last December, Minera Panamá presented a counterproposal and, since then, the parties had allegedly advanced in a 20-point negotiation, in which there was already consensus on 18. But on January 26, the Panama Maritime Authority (AMP) ordered the closure of the port of Punta Rincón, which the mining company uses to export, which is why First Quantum announced that it was suspending its operations as of this Thursday since it ran out of storage space.

The Mici considers that Minera Panamá engages in ” delaying tactics ” that have lengthened the process for more than a year, “trying to change the agreement in which the Panamanian State will not receive the fair compensation it deserves for its natural resources,”.

It urges the mining company to comply with the regulations and processes necessary for the safe operation of the mine, and “refrain from creating unrest and uncertainty about the stability of the thousands of workers and suppliers that depend on mining activity.”

In its statement, the Mici reiterated that using “pressure mechanisms” does not contribute to improving the levels of understanding that both the State and Minera Panama require for a fair, balanced, and satisfactory relationship.

“The National Government maintains its position that the signing of this agreement will represent the best interests of the Panamanian people, respecting the rights of the company and its workers,” concludes the official letter.

In a statement, Minera Panama states that it considers that all the AMP requirements have been duly met and exceeded. However, the AMP “has continued to block export operations,” the company says.

 Minera Panama announced that it will begin a partial demobilization of its workforce of more than 8,000 workers and contractors, “whose impact is expected to increase significantly in the following weeks if concentrate shipments are not resumed.”

In addition to the reductions in the workforce, the mine said that it has stopped buying supplies and services that -according to the company itself- are equivalent to 20 million dollars in weekly income from more than 2,000 Panamanian companies (always according to their calculations).

“Minera Panama is taking a systematic approach to scale back operations to ensure the safety of its workforce, prevent damage and deterioration of equipment, and preserve the integrity of the mine,” it said.

In the midst of this scenario, the company also announced that negotiations with the Government of Panama on a renewed contract continue.