Supreme court ruling doesn't mandate closure of Cobre Panamá – mining chamber

The Panamanian supreme court ruling deeming Minera Panamá's concession unconstitutional does not mean the Cobre Panamá mine has to be closed, as interpreted by the government, said the president of mining chamber Camipa, Roderick Gutiérrez.

The government and the local subsidiary of Canada's First Quantum Minerals agreed to a new contract last year after the original agreement for the copper mine was declared unconstitutional in 2017. Thousands of protesters opposed the new deal for mostly environmental reasons. The supreme court annulled the new contract in late November, ruling it was unconstitutional and prompting authorities to order the closure of the open pit mine.

“Let's clarify something: the supreme court ruling doesn't mention the closure of the mine. At no point in the 254 pages does it say 'closure of the mine',” Gutiérrez told broadcaster Telemetro.

"What's... decreed is the contract is unconstitutional, which we all already know, and as a result of that, something that has not happened in the history of mining, a mine has never been closed at this stage of operation, four years after starting its operations." 

“For the first time, a plan has had to be presented that's not a closure plan… because the mine is only gradually shutting down as activities are reduced. And since it was not possible to comply with the closure plan that had been planned from the beginning... this plan had to be presented, more than anything for the maintenance and safety of the environmental part, of the workers, of the community and of course of the machinery in the area,” Gutiérrez said.

Those arguments coincide with the ones First Quantum made in its 2023 results report published February 20, saying that the effect of the ruling "is that the updated concession contract no longer exists... The supreme court did not order the closure of the Cobre Panamá mine."

First Quantum said that on December 19, the commerce and industries minister announced plans for Cobre Panamá following the supreme court ruling.

“The validity of Panama's mineral resources code, established more than 50 years ago, was reiterated by the minister given the lack of retroactivity of the supreme court ruling. As part of these plans, a temporary phase of environmental preservation and safe management would be established until June 2024, during which time independent audits, reviews and planning activities would be conducted,” First Quantum said.

Closure “was an interpretation by the government, but not of the ruling,” Gutiérrez told Telémetro. “The ruling doesn't establish the closure of the mine because it's gradual. It has never been seen in the history of mining worldwide… and that's what the experts have said.”

Gutiérrez said that “many are concerned at the international level regarding what the future of mining in Panama will be and others are contributing from their experience how they can continue with a plan that doesn't involve closure.”

He also highlighted that the same current law that establishes the mining moratorium does not allow activities such as closure, which requires a budget.

Cobre Panamá achieved copper production of 330,863t in 2023, down 5.6% on 2022, in addition to some gold. The mine accounted for about 5% of GDP and represented up to 75% of exports.