Canadian-owned mine will begin closure in Panama after contract deemed 'unconstitutional'

BOQUETE, PANAMA -

A Canadian mining company is expected to begin the process of closing its multibillion-dollar operations in Panama today after weeks of civil unrest and protests from civilians fearing the ecological repercussions of its open-pit copper mine that is twice the size of Manhattan.

Panama's Supreme Court ruled unanimously Tuesday that a 20-year concession for the Cobre Panama mine, operated by the Canadian mining company First Quantum, is "unconstitutional," arguing that the mine damages a forested coastal area and threatens scarce water supply in the region.

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The disputed contract, which caused massive protests throughout Panama over the last month, provided First Quantum a 20-year mining right, along with the possibility of extending it for another 20 years, in return for US$375 million in annual revenue to Panama.

Following Tuesday's ruling, First Quantum confirmed its "unwavering commitment to regulatory compliance in all aspects of [the company's] operations within the country."

In a televised address on Tuesday, Panama's President Laurentino Cortizo called for an "orderly and safe closure" of the mine.

The conflict over the open-pit Cobre Panama mine has prompted protests and blockades on the road leading to the mine's power plant and on parts of the Pan American highway in recent weeks.

According to Reuters, the closure of Cobre Panama could lead to ramifications in the global copper market, as the mine accounts for about one per cent of the world's copper production.

First Quantum, which is listed on the Toronto Stock Exchange, saw a 0.8 per cent plummet in stock value this week, with the company losing more than $10 billion of its value since the Panama protests began in October.

In a company memo obtained by Reuters, First Quantum announced on Wednesday it had suspended the contracts of 7,000 employees.

The Panamanians who protested the mine, which accounts for three per cent of Panama's gross domestic product, say the ecological damage of the operations is already substantial.

As one protester told CTV's W5, the mine has "created irreparable damage to the environment."

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