Mining chamber rejects linking Cobre Panamá audit to mine's permanent closure

Panama’s mining chamber (Camipa) has criticized linking the audit of the Cobre Panamá copper mine to its definitive closure and urged authorities to frame the environmental component of the audit in line with impartial, neutral, objective, and scientific and technical criteria.

In early January, the government started a public consultation, which ends Friday, on the terms of reference for the comprehensive audit of the mine owned by Canada's First Quantum. Operations were suspended in November 2023 following a supreme court ruling declaring the new contract with the government unconstitutional.

In the document, the environment ministry indicated that, among other objectives, the audit seeks to "determine the costs necessary for an environmentally responsible closure plan" and that the plan "must aim to ensure the area eventually recovers as closely as possible to its state before mining activities."

But in a letter sent to environment minister Juan Carlos Navarro on Tuesday, seen by BNamericas, Camipa wrote: “It is not correct to orient the audit criteria towards the definitive closure of the mine, which is not ordered by the court ruling on the contract between the State and the company, and much less is it based on the assumption that environmental damage has occurred.”

It added: “The comprehensive audit is precisely the instrument by which, based on the [environmental and social impact study] of the mining project, the compliance or non-compliance of the applicable regulations during the mine operation is determined.”

Based on this argument, within the framework of the public consultation, Camipa included a detailed analysis of the audit’s terms of reference, offering specific suggestions for improvement.

Camipa proposes establishing key performance indicators to evaluate aspects such as ecosystem restoration, emissions reduction and the positive impact on local communities, which it claimed ensured a more comprehensive and objective evaluation.

Generally, “the terms of the audit must consider fair and equitable treatment, impartiality, not be based on the impairment of acquired or consolidated rights, and highlight the coherence of its objectives and avoid ambiguities.”

In conclusion, Camipa highlighted that the Cobre Panamá mine is key to the country's economic and social development. However, it acknowledged that its operation must be supported by rigorous compliance with environmental and social commitments.

“This analysis seeks to ensure that the terms of reference are effective tools so that the auditor can objectively, equitably and unbiasedly evaluate the environmental management of [First Quantum subsidiary and operator] Minera Panamá, promoting a reopening under supervised processes that protect the environment and benefit local communities,” it said.

In Camipa’s view, the audit terms of reference, as presented, “are based on the premise that there is, in fact, a negative result, a bias that conditions and reduces the objectivity and independence of the auditor, given that the operation of the mine has been subject to the applicable environmental management and auditing instruments in accordance with national regulations.”

The chamber insisted that the environment ministry must “guarantee that the audit processes are carried out objectively and within the framework of its powers, avoiding the inclusion of aspects that correspond to other bodies, which may generate conflicts of interest and set negative precedents for other industries and the development of the country.”

In 2023, Cobre Panamá produced 330,863t of the red metal, 5.6% less than in 2022, in addition to gold.