Prospect of copper mine reopening revives tensions in Panama

Piles of copper concentrate from a Canadian-owned mine closed by the Panama courts in 2023 sit on the shores of the Caribbean Sea and are now approved for export, to the dismay of environmentalists.

A red and white chimney serves as a beacon for ships, but none have docked for more than a year at the Cobre Panama mine, which had been operated since February 2019 by Canada’s First Quantum Minerals.

Earlier this month, Panamanian President Jose Raul Mulino announced that he had authorized the firm to export the copper concentrate it had already extracted before Central America’s largest open-pit mine was shut.

Around 130,000 tons of it are stored in a huge shed near the dock.

In response, the mine operator signaled that it was ready to suspend multibillion-dollar arbitration proceedings against Panama over the closure.

Supporters and opponents of the mine see it as a first step toward its reopening, although Mulino said there are still issues to be negotiated.

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“The president has given us a light at the end of the tunnel,” Sebastian Rojas, port maintenance manager at Cobre Panama, said during a visit Friday by journalists.

In November 2023, following weeks of crippling protests over the mine’s environmental impact, Panama’s Supreme Court ruled that a concession contract signed by former president Laurentino Cortizo’s government was unconstitutional.

In response, the company initiated international arbitration proceedings seeking $20 billion in compensation.

Machinery sits idle

Not far from the chimney of Cobre Panama’s thermoelectric plant, which has also been given the green light to operate again, there is a huge hole in the ground made with explosives and huge drills.

Kilometers of pipelines and long conveyor belts resemble the structures of an elevated train.

“This is an industrial city,” said Hugo Mendoza, who used to operate heavy machinery and now serves as a mine tour guide.

Cobre Panama had produced about 300,000 tons of copper concentrate a year, representing 75 percent of the country’s exports and about five percent of its national economic output.

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Its shutdown deprived the Panamanian treasury of nearly $600 million a year in royalties and raised doubts about the security of foreign investment in the country.

The closure also left around 36,000 direct and indirect workers unemployed. The mining company now has only about 1,300 employees performing maintenance tasks.

Mulino said this week that he was willing to negotiate with First Quantum about a possible reopening of the mine, angering opponents of mining.

“The government acts like it’s the company’s lawyer or legal advisor,” said Lilian Guevara, one of the leaders of the Panama Is Worth More Without Mining movement, which brings together 45 NGOs.

“It’s trying to illegally reopen this mine,” she added.

In nearby communities, there are both supporters and opponents of the mine, due to the jobs it brings as well as environmental concerns.

Since the stoppage, the company has spent about $20 million a month on equipment maintenance, salary payments and other expenses.

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Dozens of enormous trucks sit idle, each one worth several million dollars, along with other heavy machinery, some of it slowly rusting.

Source: AFP