Cobre Panamá supplier crisis worsens as government is urged to step in

The crisis affecting over 2,000 suppliers of the Cobre Panamá mine has worsened more than a year after its operations were indefinitely suspended.

In a call for help, more than 130 companies that provided goods and services to mine operator Minera Panamá, a subsidiary of Canada's First Quantum Minerals, sent a letter to President José Raúl Mulino urging “prompt action” to reactivate mining in the country and emphasizing that it is a “vital industry for the national economy.” 

The supreme court ruled that the mine's renegotiated contract with the government was unconstitutional and in November 2023, the mine was ordered to cease operations.

When producing, the emblematic copper mine represented nearly 5% of GDP and 75% of exports of goods.

The letter said 76% of companies affected by the closure were forced to reduce staff.

In addition, 42% of companies will stop operating this year if the mine is not reopened, which would generate another wave of job losses.

Roderick Gutiérrez, the president of mining chamber Camipa, told a press conference streamed on social media that to date 54,107 jobs were lost due to the closure. A year ago, the number was around 40,000.

In the letter, the companies warned that “time is running out” for entrepreneurs who generate employment. While acknowledging that the government's current priority is the reform of the social security fund, they highlighted that resuming Cobre Panamá's operations would generate tax revenues that could help mitigate the pension system crisis.

“The economic uncertainty, growing unemployment, the poor labor market, and the lack of concrete measures have pushed the supplier companies toward total collapse, thus affecting the national economy,” the letter said.

“The development of this mining project is a great contribution to the development of our great Panama, especially for the development of the surrounding communities, since much of the human talent was 100% in those areas, and today they are mired in uncertainty because unemployment continues.”

Mulino was urged to agree to a meeting at the mine facilities “as soon as possible” to get a firsthand account of the reality faced by Minera Panamá suppliers and to discuss possible solutions.

Finally, the companies said they were ignored when the previous administration decided to close the mine, but they hope the current government will take their interests and needs into account.

“We reiterate our urgent call to your government to provide clear responses and prompt action regarding the reactivation of this industry that is vital to the national economy,” the letter said.