Central America’s largest copper mine suffered a new setback on Tuesday after Panama’s Supreme Court declared “unconstitutional” the contract renewing the concession for this mining operation, which has been the subject of demonstrations and roadblocks for more than a month.
• Also read: Panama is prepared to defend itself if a Canadian mining company resorts to arbitration
• Also read: Panama: Protest against a new mining contract is growing
“We have unanimously decided to declare unconstitutional the entire Law 406,” which regulates the contract between the Panamanian state and the Canadian mining company First Quantum Minerals (FQM), said Maria Eugenia Lopez, president of the country’s highest court, at the announcement The decision was announced after four days of deliberations between the nine members of the court.
The announcement was followed by celebrations in several parts of the country as well as outside the court. Opponents of the gigantic open-air mine, located 150 miles (240 km) from Panama’s capital, disputed the legality of the contract and complained about its potential impact on the environment.
“It’s more than a victory for institutionalism, it’s a victory for popular democracy,” environmentalist Raisa Banfield told broadcaster Telemetro among protesters gathered outside the court.
After that stop, protesters began clearing certain roadblocks, according to local media.
The mining company responded in a press release, assuring that it had worked “from the beginning (…) in transparency and in strict compliance with Panamanian legislation.” She adds that she has “heard the general request” and remains committed to “a constructive dialogue that will allow us to define a course of action that responds to this request” but also “the interests and legitimate expectations” associated with the investment made.
The protests, the largest in Panama since the overthrow of former dictator Manuel Antonio Noriega in 1989, and resulting roadblocks have resulted in losses of more than $1.7 billion in the agricultural sector, tourism and trade, according to trade groups guided.
“I accept and respect the decision of the Supreme Court,” said Panamanian President Laurentino Cortizo on the X network, criticized by professional associations for his “inaction” in the face of the blockades.
The protest movement began on October 20, when Parliament approved the contract that allowed FQM to operate this mine in the Caribbean zone of the country for another 40 years (20 years renewable).
“More power”
This contract, signed in August between the government and FQM, replaced the original concession agreement, which was declared unconstitutional in 2017 because it was not concluded following a public tender or public consultation.
The government said on Sunday that it had been informed by the FQM of its intention to resort to international arbitration if the treaty binding it was declared unconstitutional, assuring that it was “ready to defend national interests.”
Some experts believe that after the Supreme Court’s ruling, the government will find it easier to defend its position. “Of course, with such a decision you have more strength,” assured AFP lawyer Ernesto Cedeño, who filed one of the appeals before the Supreme Court.
FQM, which has invested more than $10 billion in the project, emphasizes that the mine creates around 50,000 jobs, contributes 5% to Panama’s GDP and that the contract provides for annual contributions to the state of less than $375 million , i.e. ten times more than the previous agreement from 1997.
But protesters say it is seriously harming the environment because it lies in a biological corridor connecting Central America and Mexico.
In 2019, the mine produces approximately 300,000 tons of copper concentrate per year, representing 75% of Panamanian exports.