Hundreds of Cobre Panamá suppliers forced to downsize after mine closure

Most of the 2,000 Panamanian companies that supplied the Cobre Panamá mine from bases in Coclé, Chiriquí, Veraguas, Herrera, Colón and Panamá Oeste provinces have been forced to downsize their operations very significantly.

“The outlook for mining is bleak and more difficult than we could have imagined at first, since passion and feelings don't lead to good decisions,” Zorel Morales, the executive director of mining chamber Camipa told EcoTV Panamá, referring to public opposition that obliged the mine to shut down.

“The issue of these mine suppliers isn't just one company. We're talking about 75% of the 2,000 or so companies supplying the mine, which were small and medium-sized companies for whom the mine was their most important client,” he added.

Although the government and Minera Panamá, a subsidiary of Canada's First Quantum Minerals, reached an agreement last year on a new contract for the copper-gold mine after the original operating contract was declared unconstitutional in 2017, widespread protests broke out in opposition on environmental grounds, leading the supreme court to cancel it and order closure of the operation at the end of November.

The Camipa representative recalled that around 30,000 Panamanians lost their jobs as a result of the closure, including direct and indirect employees. The number of those working directly with the mine dropped to 1,500 from more than 7,000.

National private enterprise council “Conep has just published a study that they conducted which says that Coclé is no longer the province with the lowest unemployment rate. It was below 4-5%, and now it's around 13% and rising,” added Morales.

Morales explained that when a mine is designed and built, it is done in such a way that the environmental impact study establishes what the impacts will be and how the effects on the surrounding areas will be mitigated.

“This is planned in the long term because in this business there are mines that are more than 100 years old, and as you abandon parts of the mine, you restore those parts partially or progressively. The best way to close a mine is through the mine's production and to do it as established in the original design,” he underscored.

Last month, the foreign ministry announced that the government will enter into talks with First Quantum to discuss the environmental impact of Cobre Panamá.

On July 1, in his inaugural address, President José Raúl Mulino ordered a “strict environmental audit” to help determine whether the site can be temporarily reopened to responsibly prepare for its final closure.

"I imagine that the president must have thought about this and must have consulted people who know about this concept of opening to close. Things have to be done as they should be done. You can't improvise," Morales said.

In a post on social media platform X referring to Minera Panamá, Camipa reiterated that the sector remains “committed to economic reactivation and supporting these communities by working together to overcome current challenges and building a more prosperous country for all.”

“Planning the closure of a mining project from the beginning is key to avoiding negative impacts. A detailed and progressive closure prevents the consequences of an abrupt closure, guaranteeing the protection of the environment and the well-being of local communities,” it added.