Canadian mining company files notice of intent with Panama after mine ban

Canadian mining company files notice of intent with Panama after mine ban
Courtesy: Americas Quarterly

Intense protests in Panama look likely to subside as the Supreme Court has ruled that expansion and continued excavation of a particularly contentious open pit copper mine (Central America’s largest), run by Canadian mining company, First Quantum, must stop. However, two notices of intent have been filed with the nation by First Quantum with it's local subsidiary, MPSA, and partner Franco-Nevada, referencing ICSID arbitration. 


Nationwide protests erupted after, on the 20th October, concessions were awarded to First Quantum and their local subsidiary, MPSA, to expand and excavate Cobre copper mine. The deal, which would bring in 375 million USD annually to the government, reversed a 2017 Supreme Court decision noting 1997 mining concessions as illegal and, in 2022 Resolution 2022-234 suspended mining operations. 


Led by the Construction Workers Union, including other local civil groups, protestors heavily disrupted infrastructure across the nation. The Pan-American and other key highways were blocked for a period, as well as, the Cobre mine port which was blockaded by a small fleet of boats. Clashes between civilians and authorities across hotspots in the capital and also in Colon and Western Chiriqui Province resulted in over 800 arrests. Demanding a moratorium on precious metal mining, the protests were largely concerned with the likely environmental damage of the mine. 


Copper mines are notoriously pollutive, often surrounding ground water quickly become contaminated with copper acid. Chemicals and radioactive material released into the air through excavation can cause serious damage to skin eyes and lungs, for every 1 tonne of extracted copper, mining produces roughly 99 tonnes of sometimes dangerous waste material. 


Whilst President Cortizo initially defended the deal, they also proposed a referendum as protests continued. However, on the 28th November, in a historic ruling, Panama's Supreme Court ruled that the concession was unconstitutional, likely closing the mine. 


After the Supreme Court decision, those interviewed by The Guardian as celebrations began in Panama, like Lillian Guevara from the Environmental Advocacy Centre (CIAM) suggested protests were indicative of a nation who had decided “instead of sacrificing the most previous and valuable thing we have for a few million in royalties, let’s instead develop a model of sustainable development”. 


First Quantum, however, maintain that they “reserve all its local and international legal rights in regard to developments in Panama”. Panama's Ministry of Commerce and Industry have now reported that they had received two notices of intent, which both refer to ICSID arbitration, from First Quantum, with its local subsidiary MPSA, and from their financing partner, Franco-Nevada. 


Investor state mechanisms, such as the World Bank’s International Centre for Settlement of Investment Disputes, are often used by large corporations to strong arm nations into following corporate policy or financially punishing democratic or judicial decisions that do not align with their goals. In a previous ICSID case, with Italian renewables company Enel Fortuna, an ICSID ruling demanded Panama pay 15 million USD after a dispute over the largest hydroelectric plant in the country. Concern mounts that the Supreme Court decision may lead to another large settlement.  


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