Panama: Supreme Court Declares Mining Contract Unconstitutional

On Tuesday, the Panamanian Supreme Court declared unconstitutional the contract that renewed the concession for the exploitation of the Central America's largest open-pit copper mine.

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It is expected that this decision will put an end to a national crisis and open the door to international arbitration by the concessionaire, Minera Panama, a subsidiary of the Canadian company First Quantum Minerals (FQM).

The declaration of unconstitutionality occurred in response to two challenges against Law 406, which was approved by the Parliament and President Laurentino Cortizo on October 20.

"The aforementioned law is expelled from country's legal system," said Supreme Court President Maria Lopez, who extend her congratulations to the Panamanians on the occasion of celebrating 200 years of independence today.

Law 406 regulates the exploitation of the Cobre Panama mine, an investment of around USD10 billion. It mainly exports minerals to the Chinese market and was built in the heart of the Central American Biological Corridor, causing irreparable damage to the ecosystem, according to environmental groups that have been fighting against the enclave for years.

As a result of this ruling, the Cortizo administration will have to order the cessation of operations at the mine, which is not the same as closure, a process that will take years.

Minera Panama has already announced its intention to file two lawsuits against Panama before the International Centre for Settlement of Investment Disputes under the Free Trade Agreement between Panama and Canada.

On Monday night, the mining company responded, ensuring that the purpose of the notification was "merely to comply with formalities" with the aim "of opening a dialogue period of at least 90 days between the parties."

Previously, the express approval of the contract law unleashed a wave of protests in which four Panamanians died. It also triggered a teachers' strike and road blockades led by environmental activists, labor unions, and Indigenous communities.

The rejection of the mining contract also generated the largest peaceful protests in decades in Panama, led by young people.