Panama celebrates court order to cancel mine 

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By LatAm Reports Editor

In Panama, recent protests against the Cobre Panama mine, the largest open-pit copper mine in Central America, have led to significant disruptions including shortages of gas and propane, and empty shelves in supermarkets. However, a recent ruling by the country’s Supreme Court has brought a moment of celebration for protesters.

The Supreme Court declared the mining contract between the Panamanian government and Canadian company First Quantum unconstitutional. This verdict was greeted with jubilation by protesters who celebrated in the streets, waving Panamanian flags and singing the national anthem. The decision came on a symbolic day, coinciding with the anniversary of Panama’s independence from Spain, adding to the significance of the ruling.

The mine, operational since 2019, is a major contributor to Panama’s economy, representing about five percent of its GDP and 75 percent of its exports. Despite its economic importance, many Panamanians view Cobre Panama as detrimental to the environment and overly favorable to foreign interests.

This sentiment taps into a historical context of Panamanian sovereignty, notably the long struggle to regain control of the Panama Canal Zone from the United States. The government had previously renegotiated the mining contract in 2021, claiming improved benefits for the state, but the recent protests and the court’s decision highlight ongoing tensions over such projects.

President Laurentino Cortizo, who has been facing declining approval ratings, had praised the new contract for its potential economic benefits and planned to use the revenues for social welfare programs. However, the widespread protests led him to propose a moratorium on new mining projects and a referendum on the future of Cobre Panama, neither of which quelled the unrest.

The business sector in Panama has criticized Cortizo’s handling of the situation, citing significant economic losses. In response to the court ruling, Cortizo emphasized the need for all Panamanians to respect the decision.

The repercussions of the protests and the court’s decision extend beyond domestic politics. International financial analysts have expressed concerns about Panama’s investment climate, with Moody’s downgrading the country’s debt rating and JP Morgan warning of increased risks to Panama’s investment-grade status.

First Quantum, heavily reliant on the Cobre Panama mine, has seen a significant drop in its stock value and is considering arbitration under the Free Trade Agreement between Panama and Canada. In a statement, the company expressed its respect for Panamanian laws and its intention to review the court’s decision. This situation highlights the complex interplay of environmental concerns, economic interests, and national sovereignty in Panama’s evolving landscape.