HomeMarket NewsMiningPanama's Controversial Contract: First Quantum Faces Key Decision in Referendum

Panama’s Controversial Contract: First Quantum Faces Key Decision in Referendum

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Last week, Panama signed a law that granted First Quantum a 20-year contract to operate the Cobre PanamΓ‘ copper mine, putting an end to years of legal uncertainty. However, this decision has sparked outrage among locals, with protests erupting throughout the capital city of Panama City. Protestors argue that the contract was rushed through without sufficient public input and transparency, and they have also accused lawmakers of corruption.

The protests in Panama City have drawn significant attention, with some gatherings reaching over 50,000 attendees. The latest demonstration added a further 20,000 people to the cause. Organizers are urging people to move beyond social media and physically participate in these events.

Protest against Cobre PanamΓ‘ at the Punta RincΓ³n International Port on October 28, 2023.
Protest against Cobre PanamΓ‘ at the Punta RincΓ³n International Port on October 28, 2023. (Image by Raisa Banfield, X.)

In response to the mounting pressure, President Laurentino Cortizo has announced that Panama will hold a referendum on whether to revoke the controversial contract on December 17. Additionally, the president has issued a decree banning all new metal mining and imposing stricter regulations on those currently seeking permits.

First Quantum, a leading copper mining company and Canada’s largest producer of the metal, achieved its highest-ever copper output of 816,000 tonnes in 2021, primarily due to Cobre PanamÑ’s record production.

The Cobre PanamΓ‘ mine complex, situated approximately 120 km west of Panama City and 20 km from the Atlantic coast, contributes 3.5% to the country’s gross domestic product, as per government data.

This mining asset accounts for about 1.5% of global copper production and commenced operations in 2019. With an estimated 3.1 billion tonnes in proven and probable reserves, it has the capacity to produce over 300,000 tonnes of copper annually.

The current infrastructure of the complex includes two open pit mines, a processing plant, two 150MW power stations, and a port.

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