Mulino would discuss with Canadian mining company if arbitrations are suspended - Expat Community

Mulino would discuss with Canadian mining company if arbitrations are suspended

May 13, 2024 | News & Articles, Panama | 0 comments


Panama’s president-elect, José Raúl Mulino, stated on Thursday that any potential conversation with Canadian company First Quantum Minerals about the future of the large Cobre Panama mine would be contingent upon the suspension of ongoing arbitration proceedings initiated by the company after the mine’s closure at the end of 2023 by order of the Supreme Court of Justice (CSJ).

“To speak in good faith, the arbitrations must be suspended (…) I will not discuss the mine unless these arbitrations are suspended in good faith; that would be a framework that I would greatly appreciate if we want to talk calmly,” declared the president-elect during an interview with the radio program “Panamá En Directo.”

First Quantum Minerals has repeatedly expressed hope to negotiate with the new government of Panama to find a negotiated solution to the mine conflict, which at its peak employed 7,000 workers.

The open-pit Cobre Panama mine, the largest in Central America, which represented 2% of global production in 2022, ceased operations at the end of 2023 after the Supreme Court declared the concession contract unconstitutional for the second time.

The Court ruled on the contract’s unconstitutionality – renegotiated for over a year by the outgoing government of Laurentino Cortizo – amid the largest public protests in decades in Panama against mining. However, local analysts and Mulino himself argue that “the mine paid the price for others’ mistakes,” referring to the fact that the masses also protested against corruption, unemployment, and the high cost of living.

First Quantum announced the initiation of international arbitration before a court based in Miami (USA) and has indicated its intention to initiate others based on commercial treaties with Canada and South Korea following the mine closure, which began exporting and represented 4.8% of Panama’s gross domestic product (GDP) and 75% of exports, according to the company’s data. The mine started exporting that mineral in 2019.

Mulino, 64, who will assume office on July 1, emphasized that he does not yet have a defined plan for the mine but made it clear that “the only thing it will not be is repeating that contract (declared unconstitutional) or using it as a reference for another.” “I have said and I reiterate: the mine will be approached very responsibly, and I hope the same from the other party (First Quantum).

“The ideal scenario is to reach a good agreement from open to close,” added the president-elect, stressing that the Cobre Panama mine is a larger investment “than the expansion of the interoceanic canal,” valued at about $10 billion according to the Canadian miner, with facilities including a 3,000-megawatt thermal power plant, “and that must be valued in its true dimension.”

The outgoing government of Laurentino Cortizo approved a strategy in February for the orderly and definitive closure of the mine, a process with an execution cost of between $7 and $9 billion over 7 to 9 years, according to official data.

“To be able to close it (the mine), it must be opened to generate the necessary cash flows,” stated Mulino. “As it is now, with over 120,000 tons of copper concentrate accumulated, it poses a very significant risk to biodiversity, ecology, and all these aromatic herbs.”


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