Panama bans metal mining amid protests over agreement with First Quantum

First Quantum Panama

The Congress of Panama approved this Friday a bill that declares a moratorium on metal mining for an indefinite period throughout the country, although the measure does not include a recent copper concession to a subsidiary of the Canadian company First Quantum that has sparked massive protests.

At the end of October, seeking to calm popular demonstrations, the government of President Laurentino Cortizo authorized a decree to prohibit new mining concessions. However, the rule approved this Friday includes several changes to the text presented by the president.

With 59 votes in favor and none against, the rule prohibits the granting of concessions for the exploration, extraction and exploitation of metallic minerals: basic, ferrous, precious and radioactive. The rule quickly came into force after being signed by the president and published in the official gazette.

Three weeks ago, Panama’s National Assembly approved a 20-year extendable concession with Minera Panamá, a local unit of First Quantum Minerals. However, residents and civil organizations reject the agreement, arguing that it is plagued by corruption, is unfair in favor of the mining company and harmful to the environment.

Since then, protests against the contract have increased throughout the country. On Friday, people in the streets welcomed the approval of the bill, but assured that they will continue protesting since it does not change the status of the contract with the Canadian mining company.

The standoff over the future of the mine, which represents around 4.8% of the country’s Gross Domestic Product (GDP), has caused First Quantum shares to lose almost half their value in recent days.

This is the best law that could be achieved at this time, at this juncture,” said independent representative Walkiria Chandler, after ending the session.

“Could things be better? Without a doubt! (But) given the political composition of the Assembly, the fact that it has been possible to include what environmental groups proposed in this bill is quite positive,” he added.

Under the terms of the new contract, the mining company would pay a minimum of $375 million annually to the Government in exchange for two decades of continuous operations, with the option to extend them for another 20 years.

The country’s highest court is considering several challenges to the contract and may ultimately decide its legal validity.

Earlier, First Quantum said Friday that production at its Cobre Panamá mine has not been interrupted despite protests including road blockades and shortages of certain supplies.