Panama shuts down First Quantum copper mine after court rules Cobre Panama illegal

Cobre Panama. Representational image on Unsplash/Omid Roshan

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IBNS-CMEDIA: The Panama Supreme Court declared the contract of Canadian miner First Quantum Copper Mine Cobre Panama illegal on Tuesday, announcing the mine’s closure, BBC reports.

Early Protests

The government’s renewal of its contract with First Quantum Minerals had triggered mass protests.

Environmental campaigners were joined by students, indigenous groups, and labour activists.

While many took part in the protests because of their concerns for the environment and opposition to mining, others were opposed to the concession granted to First Quantum, arguing it favoured the Canadian miner and did not provide enough revenue for Panama.

Protesters blocked the Pan-American Highway and other key roads, causing fuel and food shortages in some regions, reports BBC.

They also used boats to create a sea blockade, preventing crucial supplies from reaching the mine and eventually forcing First Quantum, Canada’s largest copper producer, to suspend its operations last week.

But the recent mass protests were triggered in October when Panama’s Congress passed a law that approved the new contract with First Quantum.

Environmentalists, who say it caused destruction in a jungle area rich in biodiversity as well as depleting the water in the area, welcomed the decision.

With two open pits, a processing facility, and a port of its own, Cobre Panamá is one of the biggest copper mines to be opened globally in the last ten years.

In 2019, it started to produce copper, contributing about 1% of the world’s total output.

As per official data, the earnings from it comprised 3.5% of Panama’s GDP in 2021. In addition, the mine directly employed 8,000 people and indirectly employed tens of thousands more.

On Panama’s Atlantic coast, in the biodiverse rainforest region of Donoso, is where the mine is situated.

The Mandate 

On November 28, the Plenary Session of the Supreme Court of Justice declared that Law 406 of October 20, 2023, which approves the mining 20-year concession contract granted to a Canadian firm entered into between the State and Sociedad Minera Panamá, S.A. is unconstitutional, a ruling issued unanimously.

Panama president Laurentino Cortizo said the Minera Panamá copper mine would be closed, hours after the country’s Supreme Court declared its contract unconstitutional.

Cortizo said that he would “abide by the decision of the Supreme Court,” BBC reports.

In a later, televised speech, he said that once his government received official notice from the court, it would start a “transition process” to shut down the mine in an “orderly and safe” manner.

Prior to studying the specifics of the decision, Quantum stated that it respected Panamanian law and would provide more commentary later.

The corporation went on to say that the agreement it had reached with the Panamanian government was the product of a protracted and open negotiating process with the dual goals of ensuring environmental preservation and mutual profit for all parties.

The decision, according to environmental campaigner Raisa Banfield, was the outcome of various organisations banding together to oppose the project.