Protests may force controversial Panama mining operation to close

The Canadian mining company whose contract with Panama’s government has triggered weeks of protests said Monday that it has reduced operations and soon may have to suspend them due to a blockade of its mine’s power plant.

Minera Panama, the local subsidiary of First Quantum Minerals, said in a statement that small boats had blocked its port in Colon province, preventing supplies from reaching the copper mine.

“If the illegal actions continue impeding the necessary supplies to operate the power plant, the company will reduce the remaining processing train this week and will temporarily suspend production,” the statement said.

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Panama has been roiled by weeks of massive street protests and highway blockades as citizens worried about the impact on the environment pressure the government to revoke the contract. The protesters, a broad coalition of Panamanians, fear the mine’s impact on nature and especially on the water supply.

The mine employs thousands and accounts for 3% of Panama’s gross domestic product.

In March, Panama’s legislature reached an agreement with First Quantum allowing Minera Panama to continue operating a huge open-pit copper mine in central Panama for at least 20 more years. The mine was temporarily closed last year when talks between the government and First Quantum broke down over payments the government wanted.

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The contract, given final approval Oct. 20, allows the subsidiary to continue operating the copper mine in a biodiverse jungle west of the capital for the next 20 years, with the possibility of extending for a further 20 years if the mine remains productive.

Since protests began, the government nearly passed legislation that would have revoked the contract, but it backtracked in a late evening debate in the National Assembly on Nov. 2.

Protesters hope Panama’s courts will declare the contract unconstitutional.