The Minister of Commerce and Industries (MICI), Jorge Rivera Staff, reported that they have received five intentions of international arbitration by Cobre Panama, and one from the Cerro Quema project.
The mining landscape in Panama is in a state of growing tension. The country has been notified of at least six intentions to claim international arbitrations, by mining companies such as First Quantum Minerals, holder of Minera Panama, which was affected by the ruling of the Supreme Court of Justice (CSJ) that declared unconstitutional its contract with the Panamanian State, and the subsequent cessation of operations and closure of the Copper Panama mine.
Like a possible arbitration demand by Orla Mining, a company that operated three concessions from the Cerro Quema mining project, an operation that was also paralyzed and was not renewed after the adoption of the Mining Moratorium Act, which prohibited the granting of concessions for the exploration, extraction and benefit of the exploitation of metal mining throughout the national territory.
The Minister of Commerce and Industries (MICI), Jorge Rivera Staff, revealed that five of these arbitration intentions come from Minera Panama, which operated the Cobre Panama project in Donoso, while one comes from the Cerro Quema project.
With regard to the closure of the operations of the Cobre Panama mine, at the moment we have four intentions of arbitrations communicated to the Republic of Panama on the issue of investment and there is another in process on the commercial issue. An intention for arbitration was also received from investors of Cerro Quema, the minister said.
Although these arbitrations are not yet official, they represent a significant challenge for the Panamanian government, which faces possible disputes related to the cessation of mining operations.
It would be in the so-called “cooling period” period – which can take between three to six months of consultations before these legal remedies are formalized in international courts and instances.
“We do not have any arbitration yet, we are in the process of conversation with the investment companies,” Minister Rivera Staff told the media, leaving the presentation of Promtur’s results at the Panama Convention Center.
Rivera Staff reported that on Thursday and Friday this week the MICI’s control team will enter the Copper Panama mine in Donoso to validate the information that the company presented to the government regarding the secure management plan.
Part of the information that has been documented will be verified in the field, to proceed with the approval of this document, which is the main link between the management of the Copper Panama site and the State,” he said.
He stressed that the Panamanian State is the direct holder of this project to terminate the legal path of the contract, the result of the ruling of the Supreme Court of Justice that declared the agreement between Cobre Panama and the State unconstitutional.
Panama, threatened with six possible arbitrations of mining companies
Copper Concentrate Winery.
He reiterated that they want to validate the stability of the site mainly because of the chemical issues that exist there.
The concentrate is maintained on the site, an evaluation of the quantity and quality of this concentrate is being made and the expertise according to the recommendations we receive from the Attorney General’s Office in a legal consultation that we raise,” he said.
Panama, threatened with six possible arbitrations of mining companies
Archive aerial photograph of the project Minera Panama, a subsidiary of the Canadian First Quantum Minerals (FQM). EFE/Welcome Velasco
First Quantum Processes
On November 14, 2023, First Quantum filed a notice of intention to the Panamanian Ministry of Commerce and Industry to initiate arbitration to enforce its rights in accordance with the Canada-Panama Free Trade Agreement.
The notice of intention facilitates consultations between the government of Panama and Minera Panama S.A. (MPSA) to avoid the need to submit such arbitration, the mining company said at the time.
On November 29, Minera Panama also initiated arbitration before the International Court of Arbitration to protect rights under the 2023 concession agreement that the Panamanian government signed in early 2023 with the mining company. The agreement states that arbitration will take place in Miami, Florida.
The first arbitrations filed by First Quantum, one to the World Bank’s International Centre for Settlement of Investment Disputes (Ciadi), in Washington and the other before the International Court of Arbitration in Miami, are in the appointment stage of the third arbitrator of the process, indicating that the written and evidence exchange stage is about to enter the stage of exchange of writing and evidence and then pass to the hearings, spokespersons for the mining sector said.
South Korean state-owned company Korea Mine Rehabilitation and Mineral Resources Corp. in January this year. (Komir) announced that he would prepare the filing of a lawsuit against Panama for $747 million (1 million won) for the closure of the Copper Panama mine in the province of Columbus, in which it has a 10% stake in the shares.
Amid the situation, Canadian company First Quantum Minerals revealed it would seek compensation of $20 billion, triggering an arbitration process that could further aggravate tensions in Panama’s mining sector.
Panama, threatened with six possible arbitrations of mining companies
The MICI rejected the extension of the concession to the company shore Mining for the exploitation of three concessions of the mining project Cerro Quema. Photo: Alexander Arosemena
Other cases
In March of this year the Canadian company Orla Mining, which had the three concessions of the Cerro Quema mining project, in Los Santos province, reported its intention to start arbitration under the Free Trade Agreement between Panama and Canada.
This article has been translated from the original which first appeared in Prensa