Panama lawmakers scrap plan to annul copper mine concession

By Valentine Hilaire and Elida Moreno

(Reuters) – Lawmakers in Panama scratched provisions from a proposed bill that would cancel a recently approved mining concession extending the life of a controversial but lucrative mine by at least two decades, legislators told Reuters on Thursday.

The fate of the Cobre Panama mine, which accounts for 1% of global copper output and is operated by a local unit of Canadian miner First Quantum (NASDAQ:), has been roiled by street protesters opposed to the project over the past couple weeks.

Two independent lawmakers, Edison Broce and Juan Diego Vasquez, told Reuters that the proposed legislation will not include annulment of the concession.

The bill now focuses on enshrining into law an indefinite nationwide ban on all new mining concessions, which goes further than a similarly focused decree ordered last Friday by President Laurentino Cortizo.

Protesters have expressed concerns over the contract signed by the government and the company late last month, arguing it is tainted by corruption and too favorable to the Canadian miner, as well as harmful to the environment.

The fight over the future of the mine has caused shares of First Quantum to shed nearly half their value in recent days.

Under the terms of the renewed contract, the miner would pay a minimum of $375 million annually to the government in return for two decades of continued operations with the option to extend them another 20 years.

Last Sunday, Cortizo called for a referendum to give the public a say on the contract’s future, but lawmakers are still debating legislation that would authorize the vote.

The Supreme Court is considering several challenges to the contract, and may ultimately decide its legal validity.

But if lawmakers reverse course and seek to end the contract via legislation, that could open the door to international arbitration, according to legal experts.