National assembly committee to debate Cobre Panamá contract

On Monday, the trade and economic affairs committee of Panama’s national assembly will debate the contract signed by the government and Minera Panamá in March, while environmental groups continue to protest.

The contract for the company's Cobre Panamá copper mine was submitted on August 3, after the council of ministers and the comptroller approved the terms in June and July, and the public was allowed to submit comments in March and April.

New negotiations between the government and the subsidiary of Canada’s First Quantum Minerals were necessary because the supreme court declared the original contract unconstitutional in 2017.

When the committee is finished, the contract goes to the assembly. The assembly can approve or reject the contract, but cannot amend it.

The agreement is opposed by environmentalists and the communities surrounding the copper mine, but is approved by the government and the business community, including the mining chamber.

Broadcaster TVN reported that members of civil society group Alianza Pueblo Unido and anti-mining group Panamá sin Minería plan to protest outside the assembly when the debate starts.

After tenacious talks, First Quantum and the government agreed a 20-year contract, extendable for another 20 years, and payment of at least US$375mn a year for public coffers.

Trade and industry minister Federico Alfaro was the government's main negotiator and is now one of the main promoters of the contract.

Authorities vowed to use 50% of the annual payment for social security, 20% to increase pensions for low-income earners and 25% for the teachers’ institute. Separately, First Quantum promised to make additional contributions to rural areas in Coclé and Colón provinces.

Cobre Panamá began producing concentrates for export in June 2019. Last year, it reported 350,438t of copper output. The miner contributes 5% to GDP, represents close to half of First Quantum's total production and 75% of the country's exports of goods, according to company data.