Minera Panamá, a subsidiary of Canada’s First Quantum Minerals, is facing a potential halt in operations at its Cobre Panamá mine due to blockades by small boats at Punta Rincón port. This port is crucial for the mine as it is used for importing supplies and exporting copper concentrates. The company has already scaled back operations to one mineral processing train and anticipates running out of supplies for its on-site power plant in the week starting November 20, as stated in a recent announcement.
The blockades are part of wider social and economic unrest in Panama, which has been escalating over the past month. Initially triggered by protests against the approval of a new contract for the copper mine by the national assembly on October 20, the demonstrations have expanded to express broader discontent about issues like lack of transparency and widespread corruption in the country. While the constitutionality of the new mining contract is under review by the supreme court, the country is grappling with the impacts of the unrest, including basic goods shortages and negative outlooks from major rating agencies like S&P, Moody’s, and Fitch.
The crisis has severely affected regions like Chiriquí and Bocas del Toro, leading the country’s Chamber of Commerce, Industries, and Agriculture (CCIAP) to urge authorities to protect the rights of the population to free movement, work, education, and health. The CCIAP, in a statement, highlighted the significant losses exceeding US$1.7 billion due to the protests and emphasized the long-term, severe consequences of the current situation on various sectors, including education, commerce, and health services.
Minera Panamá has expressed its commitment to the safety and well-being of its workforce amid these challenges. Local authorities are monitoring the situation, aiming to resume normal maritime operations. The company recently reported a payment of US$567 million to the Panamanian treasury in royalties and taxes under the new contract.
First Quantum Minerals has emphasized the mine’s significant economic contribution to Panama. The mine not only accounts for over 2% of the country’s total working population but also makes substantial weekly payments to Panamanian suppliers and contributes significantly to the national GDP. Cobre Panamá is one of the largest copper mines in Latin America.