The subsidiary of the Canadian mining company First Quantum Minerals (FQM), which operates a large deposit of copper In Panama, it must present “within the next 10 working days” a plan “to take care of and maintain” the mine, “which contemplates the cessation of commercial operations,” the Government reported Monday.
This is ordered by a resolution of the National Directorate of Mineral Resources of the Ministry of Commerce and Industry (Mici) issued on Monday, which adds that “once this plan is presented, it must be approved” by the portfolio.
“The resolution issued and published in the Official Gazette today is a consequence of the ruling of unconstitutionality issued by the Supreme Court of Justice” in December 2017, “and following the mandate of Cabinet Resolution No.144 of December 15, 2022”, which ordered the cessation of operations of the Cobre Panama mine, said a statement from Mici.
The Executive of President Laurentino Cortizo ordered on December 15 the cessation of operations after it did not reach an agreement with the company Minera Panama, a subsidiary of FQM, on a new concession contract for the copper mine, the largest in Central America, with an investment of between 7,000 and 10,000 million dollars and 5,279 workers.
The Supreme Court of Justice of Panama declared unconstitutional through a ruling of December 21, 2017, but disseminated in September 2018, the 1997 law that endorsed the concession for the exploitation of the mine, given first to another company whose rights fell after several sales in Minera Panama S.A. (MPSA).
The Government and MPSA began negotiating the new contract in September 2021 and last January reached an agreement that included raising royalties from 2% to between 12% and 16%, guaranteeing a minimum annual contribution to the State of 375 million dollars, “10 times more” than what the company has previously contributed, and the payment of taxes hitherto exempt.
But throughout this year, during the drafting of the new contract, it was not possible to include the terms of the January agreement, complained the Panamanian president, who said last Friday that his government cannot “continue in a little game (with the mining company) in which we reach an agreement and then send another proposal, They tell us there are other additional conditions.”
“We have publicly stated since January that our agreement with this economic benefit (of $375 million annually) should be subject to certain protections should metal prices or profitability fall significantly. These protections were agreed with the Government of Panama,” said FQM.
The Canadian company, which said it was disappointed by the measure ordered by the Government, assured that its objective remained “to find a ‘win-win’ resolution”, and that it would continue to “support our workforce, communities and suppliers, to preserve the value and integrity of Cobre Panama”.
He also insisted that “the Minera Panama contract remains legal” because it was renewed in 2017 for a period of 20 years, a thesis denied by environmental sectors and Panamanian lawyers with the argument that the Supreme Court ruling annulled the concession.
The Minister of Labor, Doris Zapata, told TVN on Monday that after the order to cease commercial operations Minera Panama “has presented some legal instruments” in the Supreme Court of Justice, without giving more details.