After four days of discussions, the Supreme Court of Panama ruled out that the contract to operate the Cobre Panama project run by First Quantum Minerals Ltd. (TSX: FM) is unconstitutional.
On Tuesday, Supreme Court President Maria Eugenia Lopez declared all parts of Law 406 unconstitutional which allowed the miner to operate in Panama for two more decades.
However, this is not the first time the project has been deemed unconstitutional.
In 2017, the project was found unconstitutional because of deficiencies in due process. Activists say that despite declaring the mine unconstitutional, the project may still operate, just like it did in 2017.
For over a month, opponents of the copper project started protesting against the contract, which some activists say was promptly passed by the Senate and by President Laurentino Cortizo. Thousands of people, including students, protested against the mine, where cohorts were led by Indigenous groups and other syndicates.
President Cortizo said in a statement that he adheres to the decision of the Supreme Court regarding the contract.
“I reaffirm to the country my total conviction about the value of justice as the backbone of democracy,” Cortizo said. The president had previously announced a referendum to determine whether the contract should be revoked, scheduled for December 17.
Nuestra democracia la defendemos y la cuidamos TODOS. ¡Dios bendiga a Panamá! 🇵🇦 pic.twitter.com/nzrEUJaOaI
— Nito Cortizo (@NitoCortizo) November 28, 2023
Read more: First Quantum may halt Cobre Panama operations due to blockades at main port
Read more: Two killed in blockade against controversial First Quantum Minerals Panama contract
On Tuesday, First Quantum announced that the Cobre Panama mine has suspended commercial production due to the continued illegal blockades at the Punta Rincón port and roads leading to the site.
“The company is reviewing the ruling and continues to reserve all its local and international legal rights in regard to developments in Panama,” said the company.
Since the protests started, the company has lost over C$10 billion of its market value.
The mine is also applying a program of Preservation and Safe Maintenance to ensure the compliance and environmental integrity of the site, preservation of the assets and safe maintenance of the plant and facilities.
Economy Minister Hector Alexander previously said that Panama heavily relies on mining, and without the mine, the country’s economic growth would be limited compared to the 6 per cent growth expected with the open-pit mine.
According to a study by the analytics firm INDESA Capital, if the Cobre Panama mine halts operations for a year, it could stop generating up to US$4.7 billion.
First Quantum owns 90 per cent of the mine with the other 10 per cent owned by Korea Mine Rehabilitation and Mineral Resources Corporation. Franco-Nevada Corporation (TSX: FNV) contributed approximately $1.4 billion to the construction of Cobre Panamá and holds two precious metals streams on the project. The company announced last week that it has cut guidance for the year in sight of the reduced operations.
Cobre Panama has two open pit mines, a processing plant, two 150MW power stations and a port, which has been blocked by protestors.
Natalia@mugglehead.com
