Lawmakers start debating Cobre Panamá contract

Panama’s national assembly started debating the contract for the US$10bn Cobre Panamá copper mine, which the government and Minera Panamá signed.

Before debate in the plenary, the trade committee will analyze the contract. It is based on an agreement with the subsidiary of Canada’s First Quantum Minerals to keep the copper mine open. 

The council of ministers and the comptroller general endorsed the contract in June and July, respectively, and the public could submit comments in March and April.

New negotiations were necessary because the supreme court declared the original contract unconstitutional in 2017.

Social and environmental organizations are criticizing the contract, while some lawmakers also signaled opposition, according to local press.

Presidential candidates like Martín Torrijos, who previously held the top job, Zulay Rodríguez and Ricardo Lombana criticized the agreement. But Ricardo Martinelli Berrocal, another ex-president running to regain the position next year, is in favor, La Estrella de Panamá reported.

On March 8, First Quantum and public authorities agreed that the contract will remain valid for 20 years, extendable by another 20, and that the miner will pay the State at least US$375mn per year.

Commerce and industry minister Federico Alfaro was the chief negotiator. He told the assembly’s plenary that the new contract meets all expectations regarding income and is in line with international industry standards, guarantees job stability, and includes environmental protection provisions.

"The objective was to guarantee social well-being and public interest, the preservation of the thousands of direct and indirect jobs generated by the mining operation at the Cobre Panamá project, ensure economic growth and contribute to the economic reactivation of the country," Estrella de Panamá quoted Alfaro as saying.

Independent lawmaker Juan Diego Vázquez claims the talks were not transparent, so intense debate is required, according to Prensa Latina.

Environmental NGO CIAM filed a protection of guarantees with the supreme court in July to stop the agreement. CIAM claims the public wasn’t consulted appropriately and demands that the contract be suspended until the lawsuit is resolved.

Cobre Panamá began producing ore for export in June 2019. Last year, it produced 350,438t of copper.

It contributes 5% to national GDP, represents close to half of First Quantum's total production and 75% of national exports of goods, according to company data.