Panama Congress Revokes First Quantum’s Mine Contract, Sparking Controversy and Economic Concerns

In a recent development, the Panama Congress has revoked the contract between the Panamanian government and Canadian mining company, First Quantum. This decision now places the responsibility on the Supreme Court to determine the constitutionality of law 406, which had previously made the contract official.

The enactment of the multi-billion dollar agreement between the government and First Quantum had led to widespread protests in Panama City. Demonstrators expressed their concerns over the lack of public input and transparency in the fast-tracked contract, as well as making corruption allegations against lawmakers.

A significant worry among locals revolves around the potential impact of the mine on drinking water and the Panama Canal. The already dry October, driven by El Niño, has heightened concerns about water scarcity. However, First Quantum has repeatedly reassured that the mining operation is situated far away from any drinking water sources.

In response to the unrest, President Laurentino Cortizo announced plans for a referendum to revoke the controversial contract. However, the parliament has since rejected the proposal, effectively removing the referendum from the table.

Analysts predict that the decision to cancel the Cobre Panama mine’s contract will have negative implications for Panama’s GDP growth. While the country was initially projected to experience a 6% economic growth in 2023, this cancellation could result in a significant drop to just 1%.

First Quantum, based in Vancouver, is renowned as one of the top copper miners globally. Additionally, it holds the distinction of being Canada’s largest producer of copper, with a record output of 816,000 tonnes in 2021, largely driven by the success of Cobre Panama.

Frequently Asked Questions (FAQ)

What prompted the revocation of the contract between Panama Congress and First Quantum?
The revocation was initiated due to widespread public protests against the contract, citing concerns about lack of transparency and corruption.

What are the main concerns among locals regarding the mine?
Locals are primarily worried about the potential impact of the mine on drinking water sources and the already water-scarce Panama Canal.

What is the potential economic impact of canceling the Cobre Panama mine’s contract?
Analysts predict a significant decline in Panama’s GDP growth, with the previously projected 6% growth for 2023 dropping to just 1%.

What is First Quantum’s standing in the mining industry?
First Quantum is recognized as one of the leading global copper miners and holds the distinction of being Canada’s largest producer of copper.