On November 28, Panama’s Supreme Court ruled unanimously that the 20-year contract granted to Canadian mining company First Quantum is unconstitutional. The decision came after weeks of nationwide protests forced the government to announce a referendum on Vancouver-based miner’s contract for December 17. Now, however, the court seems to have decided the fate of the Canadian-owned Cobre Panamá mine.
The court’s decision will probably lead to the closure of the mine, the largest open-pit copper project in Central America and the country’s most significant private investment, which has been the source of enormous social, political, and economic unrest over the past few years. Given that President Laurentino Cortizo banned all new mining concessions and contract renewals on November 2, it is unlikely that First Quantum will be able to negotiate another deal with the Panamanian government.
A wave of mass protests in Panama, organized by environmentalists, indigenous activists, and trade unions, has forced the government to hold a referendum on the contract of Canadian-owned First Quantum Minerals, the country’s largest mining company.https://t.co/GKugzxDvlL— Jacobin (@jacobin) November 29, 2023
Following the court’s ruling, Cortizo announced “the transition process for an orderly and safe closure of the mine will begin.” First Quantum responded with legal threats, promising to take the Panamanian government to the Miami-based International Court of Arbitration in an effort to hold onto the lucrative copper mine. First Quantum argues that the mine’s closure violates the terms of an agreement struck by the company and the Panamanian government earlier this year, as well as the Canada-Panama Free Trade Agreement, negotiated by Stephen Harper and Panama’s right-wing former President Ricardo Martinelli in 2008.
Cortizo’s plans have not been welcomed by all in his government. In response to the president’s acceptance of the court ruling, Panama’s Trade Minister Federico Alfaro resigned. His resignation letter stated: “We are likely to see the loss of jobs, economic instability, international claims from investors and the impact on the level of investment already announced by the rating agencies.”
Canadians who have followed the battle over Cobre Panama may recall that during a production halt last year, Trudeau’s Trade Minister Mary Ng communicated directly with Alfaro about tensions between his government and the Canadian company. Production resumed shortly thereafter.
After the Supreme Court’s decision, First Quantum CEO Tristan Pascall flew to Panama, presumably in response to the mine’s closure. He has since stated that First Quantum is on thin ice in the long-term: “We have strong finances in the short and medium term, but yes, we have to see how we sustain them in the long term.” The company will likely try to squeeze Panama at the International Court of Arbitration to make up for future losses.
The legal sparring between First Quantum and Panama will continue, but for the moment, social movements—including labour unions, Indigenous groups, environmental organizations, and more—are celebrating the mine’s closure as a historic victory. Activist Serena Vamvas said, “At first there were only a few of us but now we all understand that Panama’s gold is green.” Lilian Guevara of the Environmental Advocacy Centre (CIAM) stated, “The people of Panama have decided ‘We don’t want to be a mining country’… Instead of sacrificing the most precious and valuable thing we have for a few million in royalties, let’s instead develop a model of sustainable development.”
The mine’s closure is clearly an environmental victory, but protestors have also celebrated the court’s ruling as a reclamation of Panamanian sovereignty from the outsize influence of Canadian mining companies. As a protestor named Ramon Rodriguez told Al Jazeera, “I’m protesting because they are stealing our country. They are just handing it over… The sovereignty of our country is in danger.”
Another Panamanian directly connected the domination of foreign capital to the Spanish colonial period. As the court made its ruling on the anniversary of Panama’s independence, the protestor said, “Today, we are celebrating two independences…Independence from Spain and independence from the mine. And no one is going to forget it.”
Analysts have identified the main issues at the heart of the Cobre Panama conflict. In the dense language of the trade: “Trust could be enhanced by doing more to meet increased expectations around greater stakeholder collaboration for mutual benefit. This requires transparency, listening to concerns and desires, and involving stakeholders in finding solution.”
The layman translation? People don’t trust Canadian miners, and they want their governments to protect their national interests, both economic and ecological, from companies that operate under the maple leaf.
The closure of First Quantum’s mine in Panama represents a refutation of Canadian mining in Central America and a challenge to Ottawa’s Critical Minerals Strategy (CMS), a policy through which Canada aims to assert greater control of mineral inputs for high-tech production including electric vehicles.
Cobre Panama’s closure embodies a key contradiction of the CMS: Canada wants to develop close-to-home mineral supply chains as an alternative to China, but the people close to home (be they in Mexico, Central America, or South America) know that Canada and its companies don’t have their nations’ best interests at heart. After all, why should Latin Americans trust Canadian companies when they strike shady behind-closed-doors deals, pollute the local environment, and do little to guarantee development and economic security?
The Panamanian Supreme Court’s decision has surely rattled Ottawa, which is trying to build a “Western supply chain” of minerals on Canadian and US terms. They may be thinking, ‘If Panama can defy us, what’s stopping Guatemala, or Chile, or Peru?’ And Ottawa may issue threats, like they did when the government of Kyrgyzstan nationalized the Canadian-owned Kumtor gold mine in May 2021, or actively intervene on behalf of the mining industry, as they have done around the world but most recently in Tanzania.
For the moment, however, Panamanians have a lot to celebrate. They stood up to a Canadian mining company and won. That in itself is an incredible feat.
Owen Schalk is a writer from rural Manitoba. He is the author of Canada in Afghanistan: A story of military, diplomatic, political and media failure, 2003-2023.