Pro-govt lawmaker presents initiative to reform Panama's mining code

Parliamentarian Melchor Herrera of Panama’s ruling Democratic Revolutionary Party (PRD) presented a legislative initiative to reform the regulatory framework for mining operations and adjust the tax regime for the production of mineral resources.

The national assembly reported on its website that the objective of the lawmaker is to "increase salaries and strengthen public finances."

According to Herrera, the purpose of modifying Panama’s mineral resources code is also aimed at strengthening the operating framework of the industry.

The member of the economy and finance committee added that the proposal seeks more royalties for development programs.

Another aspect of involves establishing a regulatory framework for mining operations that, according to the lawmaker, would allow the State to cover itself against infringements that may emerge.

The trade and industry ministry (MICI) confirmed in June that, together with the IDB, reforms to the 1963 mining code are being considered to provide the country "with public policies for the extraction of minerals, in accordance with best international practices.”

Four years ago, given the proven growth potential of mining in Panama, the then government of Laurentino Cortizo set out to guarantee "the proper role" of this industry in economic development, ensuring respect for environmental laws and regulations and the protection of the rights of communities.

In 1999, the contribution of mining to Panama’s GDP was less than 1%, while currently the figure is estimated at 4.8%, mainly due to the Cobre Panamá copper-gold mine of Canada’s First Quantum Minerals. In March, the company negotiated a new contract with the government that must be ratified by the assembly in the legislative period that began this month, after the original contract was declared unconstitutional by the courts.