Canadian Mining Company To Cease Operations Of Its Copper Mine In Panama

Panama government ordered the local subsidiary of a Canadian mining company to stop operations at its massive open pit copper mine.

According to the Associated Press, Minera Panama is the largest private investment in Panama, and the subsidiary of Canada’s First Quantum Minerals Ltd. that employs thousands of people. It accounts directly and indirectly for about 3% of the country's gross domestic product (GDP). According to a statement, Panama’s President Laurentino Cortizo’s cabinet voted Thursday to order the mine to halt operations. The decision is seen as a rare move among Latin American countries, according to Bloomberg.

As for the future of the mine’s workers, the Labor Ministry was told to take steps that would guarantee employment and labor protections for them.

The decision, which was announced by Cortizo in a televised address, came after Minera Panama failed to meet commitments agreed to in January for a new contract. It was “reasonable and satisfactory” for the people of Panama, said the statement. On Jan. 17, Minera Panama agreed to a deal with the government that included a minimum annual payment of $375 million, the government said. It did not sign the new contract by Dec. 14, which was a deadline that was set by the government, despite negotiations.

Before Cortizo’s announcement, the company said in a statement that its new proposal “would make Cobre Panama one of the highest payers of royalties and taxes amongst the large copper producing mines in the Americas.” It said that the proposal included the agreements that were made earlier this year. It included a "contribution of $375 million in benefits per year with mutually agreed protections.” The company also said that legal protections on termination that were needed as well as "stability and transition arrangements could not be agreed upon.”

The company earlier said that it was open to further dialogue. According to Reuters, First Quantum shares sunk as it tumbled 14.7% in Toronto trading.

In 2022, First Quantum estimated the Cobre mine to produce 340,000 to 350,000 tonnes of copper. It accounted for more than 40% of its overall copper output. The company has invested $6 billion in the open pit mine, where operations started three years ago.