Back in September 2023, Panamanians, including SUNTRACS members, were protesting the mining concession granted to First Quantum. Image source: @SuntracsPanama/’X’

Written by: Owen Schalk

Six months after the closure of its open-pit copper mine in Panama, Canadian company First Quantum Minerals is hoping the new Panamanian government will help them bring the mine back into operation.

This May, presidential elections in Panama brought to power the conservative José Raúl Mulino, former minister of public security under President Ricardo Martinelli. Mulino is in the process of building a “business-friendly cabinet” – something international investors, including Canadian companies, are surely pleased about.

Mulino has a reputation as a supporter of mining. He was public security minister in 2011, the year Martinelli dispatched riot police against Indigenous-led protestors demanding the annulment of mining and hydroelectric concessions on Ngäbe-Buglé territory. Riot police killed one protestor, injured 32, and detained 40. The government eventually caved, vowing not to approve mining projects on Ngäbe-Buglé lands.

Mulino’s pro-mining track record is certainly welcome news to the Vancouver-based mining company First Quantum, which is hoping to restart its Cobre Panama mine, forcibly shuttered in November 2023 after progressive anti-mining protests ground the country to a halt.

First Quantum inherited the mine’s contract from another Canadian company, Petaquilla Gold, in 2013. Petaquilla had signed a contract with the Panamanian government in 1997, which the country’s supreme court ruled unconstitutional after Panama’s Environmental Advocacy Center (CIAM) filed a lawsuit against it. The lawsuit argued that “the concession was given without public bidding, without consultation with the communities and without a true environmental impact study.”

First Quantum resisted the ruling, but the court upheld the decision in 2021. As a result, the government forced the company to enter new negotiations, which progressed badly. At one point, the Panamanian government unilaterally halted production at Cobre Panama. Ottawa responded by dispatching officials to vouch for First Quantum with the Panamanian government.

On October 20, 2023, the company and government came to a new agreement, the terms of which remained highly generous to First Quantum. Among other things, the contract granted First Quantum the right to continue its open-pit operation for at least another twenty years.

Panamanian society rose in opposition to the contract. Protestors blocked roads and ports and disrupted major infrastructure. As Niall McGee wrote: “The contract was denounced by environmentalists, Indigenous groups, labour activists and religious groups, who opposed it both because of its financial terms and because of the impact the open-pit mine has on the environment.”

First Quantum’s market value plummeted 40 per cent, while the Panamanian government claimed that the popular mobilizations cost the state $80 million per day. First Quantum smeared the protests as “illegal and violent.”

Facing suffocating public pressure, President Laurentino Cortizo banned all new mining concessions and contract renewals on November 2, 2023. And on November 28, 2023, Panama’s Supreme Court ruled unanimously that the contract granted to First Quantum was unconstitutional. Following the court’s ruling, Cortizo announced “the transition process for an orderly and safe closure of the mine will begin.”

First Quantum responded by taking the government of Panama to international arbitration, hoping to squeeze $20 billion out of the Panamanian state as punishment for closing Cobre Panama. Unsurprisingly, Canada’s trade minister Mary Ng sided with First Quantum, stating:

“First Quantum Minerals is a really important Canadian company…I've met with them, I continue to meet with them, and I'm really looking to support the Canadian company…as best as we can.”

A report commissioned by the Foundation for Integral Community Development and the Conservation of Ecosystems in Panama (FUNDICCEP) found many examples of police repression and criminalization against anti-mining protestors in late 2023. The report documents firsthand accounts of excessive force against university students, environmentalists, union members, and Indigenous people; hundreds of injuries; more than 1,500 cases of arbitrary detention; and acts of retaliation against groups that supported the protests, such as teachers and unions.

Ottawa, for its part, has kept silent about these documented cases of state repression against anti-mining activists.

Despite the Cobre Panama mine being ruled unconstitutional, and despite First Quantum suing Panama for $20 billion, the company clearly hopes the new government will help them get the mine up and running again.

Back in February 2024 – several months after the closure of Cobre Panama – First Quantum CEO Tristan Pascall claimed that the next Panamanian government should not get in the way of the mining sector. “There’s significant economic challenges emerging in the country,” he said, “and we believe it’s impossible for the next government to ignore the contribution that a responsible mining sector can make.” He added that anti-mining attitudes in Panama were the result of “fake news” and “misleading information.”

The closure of Cobre Panama hit First Quantum’s finances hard. As a result, First Quantum considered selling some of its stakes in other mines around the world, including Zambia. But as the Financial Post reported, the company “[is] still holding out hope for Cobre Panama.” As Pascall said: “We are absolutely committed to Panama. We put $10 billion into the country…Ultimately, we will see resolutions. I am confident in that.”

First Quantum has already announced that they will “seek talks with Panama’s incoming president in an effort to resolve the dispute that shuttered the Cobre Panama copper mine.”

According to The Globe and Mail, an analyst with RBC Dominion Securities Inc. named Sam Crittenden advised clients that “the election of Mr. Mulino is a good outcome for First Quantum given his history of supporting the mining industry.” Meanwhile Brian Cattell, spokesperson for First Quantum, informed The Globe and Mail that the company is “looking forward to a dialogue with the new administration, and working to find a resolution that is in the best interests of Panama.”

Bloomberg reported:

President-elect Jose Raul Mulino, seen as an investor favorite, has said little about First Quantum’s $10 billion mine, which closed last year following months of civil unrest. But his pro-business credentials and historical support for the mining industry are raising hopes for a reopening.

RBC Capital Markets has noted, “Mulino is viewed as pro-business and has been supportive of mining in the past.” Given the fraught atmosphere around Cobre Panama, however, “he was careful with comments about mining in the election campaign.”

For his part, National Bank of Canada analyst Shane Nagle stated that Mulino’s election “is not likely to accelerate discussions related to reopening the mine.”

While some doubt that Mulino will reopen the mine, activists inside Panama are worried. According to Joana Abrego, a legal manager at Environmental Advocacy Center of Panama (CIAM), there are concerns “for a potential reactivation of the mine” among the activist community. Raisa Banfield, an environmental activist and former vice mayor of Panama City, told Al Jazeera that “the mine is in hibernation…it’s waiting for the new president.” In other words, its future depends on Mulino’s policies toward First Quantum.

During the presidential campaign, all candidates vowed to uphold the Supreme Court’s ruling that the Cobre Panama contract is unconstitutional. Nevertheless, only two candidates called for the total closure of the mining site: Ricardo Lombana of the Another Way Movement and independent leftist Maribel Gordón. Other candidates have direct connections to Canadian mining, as Octavio García Soto explains:

Vice President Carrizo…has admitted to serving as a lawyer for the mine’s previous owner, Petaquilla Minerals. Another candidate, former Foreign Minister Rómulo Roux, was part of the law firm that advised the mine’s most recent owner, the Canadian group First Quantum, about acquiring the site.

President-elect Mulino’s pro-mining record, and the general closeness of the Panamanian elite to Canadian mining capital, has activists worried about the reopening of Cobre Panama.

One thing is definite: as First Quantum enters talks with the Mulino administration in the hopes of reopening the mine, the company will have the ardent support of the Trudeau government.

For opponents of Canadian imperialism, and supporters of the Panamanians’ right to decide their own future, the ongoing drama around Cobre Panama must be followed closely.

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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 and the co-author of Canada’s Long Fight Against Democracy with Yves Engler.

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