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Canadian Mining Company Minera Panama and Its 21-Year Old Petaquilla Mining Operation

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21-year old mining contract  ruled unconstitutional

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A  1997 mining concession contract between the  Panama State and the Minera Petaquilla company has been ruled unconstitutional by the Supreme Court 10 years after the action was presented.

The unconstitutionality action was presented by the  Ambiental Advocacy Center (CIAM), for violating several articles of the National Constitution related to human rights and the conservation of the environment.

The contract dating from 21 years ago led  to the creation of Petaquilla Gold, which was canceled by the State, as well as Minera Panamá that operates in Donoso, Colon.

Sonia Montenegro, executive director of CIAM said “We regret that the decision is late, but believe that it is an environmental achievement for the country



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The Panamanian Government comes out in defense of Canadian mining investment

Wed, 09/26/2018 - 17:54

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The Panamanian government came out today in defense of the contract that allows the Canadian company Minera Panama to continue with the development of a copper mine started more than 20 years ago, despite the fact that the Supreme Court (CSJ) declared the law that supports it unconstitutional.

"After reviewing this ruling, which is still subject to various procedural stages," the Ministry of Commerce and Industry (MICI) "considers that the mining concession contract signed between the State and the company Minera Petaquilla SA, (Minera Panamá) on February 16, 1996, and its extension, remains in effect in all its parts," the entity said in a statement.

He also said: "we respect the decision the CSJ has," and warned "the MICI, as the entity responsible for the exploitation of mineral resources and the attraction and promotion of investment in Panama, is giving Attentive follow-up to the case".

The maximum Panamanian court declared days ago the unconstitutionality of Contract Law 9 of February 25, 1997, which approves the contract between the State and the company Minera Petaquilla, S.A. (today Minera Panama).

But clarified that "the aforementioned ruling only declares in its operative part the unconstitutionality of Law 9 of February 25, 1997, however, does not rule on said concession contract."

It warned that the copper mine of Minera Panama "is one of the most important projects in our country, with the largest private investment in our history, which exceeds 6,000 million dollars."

"Currently, it is the largest private employer in the country with an active workforce of more than 12,000 workers and has made purchases from Panamanian suppliers exceeding $ 1,100 million." In the future, the company estimates that once the plant goes into production the Copper exports could reach up to 2 billion dollars annually," it noted.

After also describing the infrastructures that are being built, it maintains that for this reason on December 30, 2016 it renewed the concession for 20 more years.

Likewise, it justifies that "the company is in its legitimate right to make the pertinent legal considerations and we hope that they are analyzed in strict law and in compliance with our laws" and the MICI assures that it is committed to "guarantee the legal security of investments" and the promotion of Panama as a strategic center for foreign investment in the region."

Yesterday, the Panamanian Mining Chamber expressed its "deep concern" about the ruling that declared the law that protects the Minera Panama project, in charge of the Canadian Firts Quantum, unconstitutional.

The Chamber presented a legislative history regarding mining in Panama and concluded that "the merits of the CSJ's argument to declare the Contract Law unconstitutional" has no validity.

"The affectations and future damages in social environmental matter and of public interest that are argued in the unconstitutionality lawsuit filed 10 years ago do not agree with the current reality,"said the institution.

Canadian mining company First Quantum said Tuesday in a brief statement that it considers that the Supreme Court's ruling against the law that guaranteed the mining concession in 1997 "does not affect" its project.

"Minera Panama, a subsidiary of the company, understands that the decision of the CSJ only affects the enactment of Law 9 and does not affect the mining concession contract itself, which remains in effect and therefore allows the continuity of development of the Panama Copper project," said First Quantum, which expects to start mining next year.



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Judicial Ruling Against Mining Company

Arguing that the basic principles of public procurement were not complied with, in Panama the contract between the State and the company Petaquilla Minera has been declared unconstitutional.

Tuesday, September 25, 2018

The legal dispute began in 2009, when the Environmental Advocacy Center (CIAM) filed an unconstitutionality appeal against the contract that grants a twenty year concession to Cerro Petaquilla to exploit and sell gold, copper and other mineral resources.

Nine years later, Law 9 of February 25, 1997 has been declared unconstitutional by the Supreme Court of Justice and, according to the court ruling, the concession did not represent the best interests of the State. When the decision is published in the Official Gazette, the contract will cease to exist.

See also "Metalliferous minerals market in Central America"

In relation to the repercussions that the ruling could have for the Panamanian government, Juan Carlos Araúz, former president of the Bar Association, told Laestrella.com.pa that " ...This decision could result in economic claims being made against the State. 'It would not be surprising if this ruling triggers a conflict in international arbitration tribunals over the damages suffered by the company.'"

Regarding the issue, Jorge Obón, spokesperson for the company, explained that " ... the mining companies have invested more than $10 billion in the development of this activity in the province of Coclé. 'They can not leave thousands of workers out of work or leave the legal security of foreign investors in the country in limbo.'"



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Mining giant reacts to Panama court ruling

Minera Panama has built its own port and power station
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Minera Panama, a subsidiary of First Quantum Minerals Ltd, understands that the recent decision of the Supreme Court   over  a Petaquilla  mining concession  recent only affects the promulgation of Law 9 and does not affect the mining concession contract itself, which remains in effect and therefore allows the continuity of the development of the Cobre Panama project says a  First Quantum  press release issued on Tuesday, September 25

Minera Panama is in the process of obtaining and formally examining the ruling and its applicability and is working with the appropriate parties to identify the appropriate legal resources. Such remedies would need to be analyzed by the Supreme Court.

The Cobre Panama project employs more than 12,600 people, of whom approximately 1,500 come from the neighboring communities of Donoso and La Pintada. The  $7.5 billion project is the largest private investment in the history of Panama.



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Panamanian employers ask to protect legal security after ruling on mining

Sat, 09/29/2018 - 20:24


One of the main business associations of Panama said today that the judicial ruling that declares unconstitutional the law that endorsed a mining concession two decades ago is "worrisome" and affects the legal security of the country.

The Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) said Friday in a statement that it is necessary to strengthen the legal security of the country, since it "depends on our ability to attract employment-generating investments (...) and the The Supreme Court must be the guarantor of this."

The Supreme Panamanian declared unconstitutional the "Contract Law 9 of February 26, 1997" that endorsed a concession for the extraction of gold, copper and other minerals granted to Canadian Minera Panamá in the Petaquilla area, a hill located in the district of Donoso, in the Caribbean province of Colón.

The ruling was issued after the Environmental Advocacy Center (Caim), an environmental NGO, filed an unconstitutional appeal against the law in 2009, considering that the bill was harmful to the Panamanian State and to the country's natural resources.

The CCIAP claimed on Friday that "it is worrisome that the decision on the process in question has taken almost a decade", and declared that this delay "confirms the purpose of continuing to promote the changes we promote in the administration of justice, through constitutional reforms".

The concession granted to Minera Petaquilla, which after several sales changed its name to Minera Panama, expired in February of last year, but the current government decided to extend it for another 20 years, until February 28, 2037, as published in the Official Gazette. 

Minera Panama, which belongs to Canadian First Quantum, is currently developing a project on the Caribbean coast of Panama known as Cobre Panama, which is considered the largest private investment in the country's history (6,300 million dollars) and employs more than 12,600 people.

The mine will start operations next year and is expected to export more than 320,000 metric tons of copper per year, equivalent to approximately 2,000 million dollars, according to the company.

"The ruling created unnecessary uncertainty in the largest foreign direct investor that has existed in the history of the country," said the Chamber of Commerce, chaired by Jorge Juan de la Guardia.

Both the mining company and the Panamanian government have said that the judicial ruling does not affect the Donoso copper mine because what is declared unconstitutional is the law that was passed to give legal certainty to the agreement and not the concession itself.

The Minister of Labor and Labor Development, Luis Ernesto Carles, said on Thursday that "the workers of the Cobre Panama mining project do not have to worry that their jobs are not at risk."

The environmental association, however, considered Monday in a statement that the "ruling implies that the extension granted to Minera Panama is null and void" because "the accessory follows the fate of the main issue."

The Donoso project also includes a 300-megawatt power generation plant, an electric transmission line, an international port and a mineral processing plant.

The mining sector represents 2.5 percent of Panama's gross domestic product (GDP), but the country's Mining Chamber estimates that it will reach 9.5 percent when Donoso begins its copper exploitation.



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Businessmen ask the Panamanian Supreme Court to guarantee legal security for mining

Mon, 12/17/2018 - 12:48


A business chamber in Panama asked today the Supreme Court to hear the appeal for clarification of a ruling against the law that gave life to a mining concession more than 20 years ago, and that may affect a copper project of 6,300 million dollars soon to start operations.

It involves the Panama Copper project, owned by the Canadian company First Quantum, "the largest foreign investment in the history of the country of 6,300 million dollars," recalled this Sunday the Chamber of Commerce, Industry and Agriculture of Panama (CCIAP).

The Supreme Court of Justice (CSJ) determined last September in a ruling that the "Contract Law 9 of February 26, 1997" endorsing the mining concession it’s unconstitutional, contract that has been sold several times over the years, and now belongs to the company Minera Panamá, subsidiary of First Quantum.

This ruling responded to a resource presented almost a decade ago by the Center for Environmental Advocacy (CIAM), a reputed Panamanian environmental association that has said that it cancels the concession to First Quantum.

But the Canadian firm said it believes that the judicial decision "does not affect" its project, although last October it presented a pack of legal remedies, including an appeal for clarification of the ruling.

CCIAP highlighted on Sunday the magnitude of the mining project in figures, saying that "it will contribute 4% to the Gross Domestic Product (GDP) with approximately 2,000 million in exports from its operational phase", which is scheduled to begin in the first months of 2019. He also pointed out that the project "shows an advance of 83%, generating 13,000 employed people, 30 million dollars in salaries; an investment of more than 1,100 million dollars in purchases to 1,400 local suppliers, and 120 million dollars annually in worker-patronal quotas to the Social Security Fund ".

Minera Panamá "has built an international port, a 300MW power plant, a mineral processing plant and the mine itself," added CCIAP, bringing together more than 1,800 companies from 15 economic sectors in Panama.

"All of this positive impact on the national economy is uncertain, since it's pending on the clarification from the Supreme Court of Justice on the ruling related to the Petaquilla Law Contract, although Minera Panama is a different company," he warned.

CCIAP "hopes that, in order to guarantee the legal security enshrined in the laws of the country, the Supreme Court of Justice will attend to the clarification requested."

"It is known that the legal security that prevails in the country depends on our capacity to compete for employment-generating investments, which is why we must strengthen and consolidate it, instead of subjecting it to dangerous risks." The case of Minera Panamá and its Panama Copper project is a timely example of both aspects," he argued.



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Minera Panama copper exports start mid-year

Posted 18/02/2019
The first shipload of copper concentrate from the Minera Panamá, mine  in Donoso, Colón, will leave in mid-year. and spearhead a significant boost to  Panama’s economy.

Manuel Aizpurúa, spokesman for the subsidiary of Canada's First Quantum, during a ceremony, to mark operation of the mills on Monday, February 11. said that the project has the capacity to export 320,000 tons of copper concentrate.

The copper project has been a $6 billion investment.

Minera Panama has a concession of 13,000  thousand hectares in one of the most wooded areas of the country, which sparked criticism over for the deforestation in the area.

The company says that only 5,000 hectares will be used, and at the end of the project, it will be reforested.First Quantum estimates that the plant will generate $2 billion in exports annually equivalent to 2.1% of the country's GDP.



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Countdown to the huge copper mine in Panama starts exporting

Tue, 02/19/2019 - 10:09

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It is the most important private investment project in the history of Panama and one of the largest copper mines in the region: Cobre Panama is practically operational and is preparing for start exporting mineral concentrate from the second half of the year.

Nestled in a jungle and steep hill, in the area of Donoso, 200 kilometers north of the capital, this open-pit mine plans to export 320,000 metric tons of copper concentrate per year to full capacity, which in the international market it is equivalent to 2,000 million dollars.

The mine, which has a useful life of 34 years and which construction amounts to 6,300 million dollars, will triple Panamanian exports, which do not exceed 600 million dollars a year.

"This project is the largest foreign investment in the history of the Republic of Panama and the second most important infrastructure project, after the (interoceanic) canal and its expansion", Panamanian President Juan Carlos Varela said on Monday.

The president participated in the so-called "first grinding", a symbolic act in which it is commemorated that for the first time the copper rocks are being ground and with which the mining company warns potential buyers that it will soon start exporting.

Panama is thus entering the world copper market, a relatively stable commodity and increasingly used in the technology sector and in the construction of hybrid cars, according to analysts. Chile is by far the largest producer of copper in the world and China the main buyer.

The project director of the Canadian multinational First Quantum Minerals, Zenon Wozniak, acknowledged in the same act that "more than one thought it would be impossible" to move the mine forward when the company acquired the rights in 2013.

"Those who doubted said it was a very remote place, Donoso was isolated and the land was treacherous, it was too rainy and the country had no experience in copper mining, today we say to everyone who doubted they were wrong", the manager added.

The project, which has employed more than 13,000 people since it began, also includes the construction of an international port on the Caribbean coast from where ships loaded with copper will depart, a kilometric access road and a 300-megawatt power plant (MW).

Panama has placed much of its hopes on this copper mine to once again take the lead in economic growth in Latin America.

The majority of international organizations agree that the country, which a few years ago was the envy of the region with double-digit rates, will grow above 5.5% in 2019, more than one point more than last year, mainly thanks to the mine.

"Today (this Monday) we began a new economic era in our country, with a diversification of our pillars of economic growth and social development", said the Panamanian president.

The mining sector in Panama represents only 2.5% of the national economy, but the Chamber of Mining estimates that it will reach 9.5% of GDP when copper begins to be exported.

The history of this site, which also includes molybdenum and gold to a lesser extent, dates back to 1968, when it was discovered by an expedition from the United Nations. The Canadian Petaquilla Minerals obtained in 1997 a concession to exploit 13,000 hectares, but did not make any development and ended up selling the rights.

The work has gone through different vicissitudes since its inception, such as a long strike in demand for wage increases or a judicial ruling that annulled the 1997 mining concession, in addition to criticism from environmentalists for the alleged impacts on the environment of this megaproject.



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Panama Wants More as Contract with Minera Stymied


The Minera Mine in Donosco

Posted 29/05/2019

A bill approving a contract between the Ministry of Commerce and Industries (MICI) and t Minera Panama) which has invested over $6 billion in the Panama economy. has been rejected by the National Assembly’s  Economy and Finance Committee.

The project was included in the agenda of extraordinary sessions convened, until June 30, by President Juan Carlos Varela.

Earlier committee chairman Nelson Jackson Palma (CD)  said the state should review the royalties it will receive for the extraction of copper by First Quantum, owner of Minera Panama, which operates in   Donoso,  Colon province. 

The commission began the discussion of bill 766 on Wednesday, May 29. Jackson considered that the environmental damage does not justify the 2% royalty that the company will give to the State and commented that, as a minimum, it should receive 10%.

First Quantum is preparing to start the export of copper concentrate in  June and this year it expects to sell between 140,000 to 170,0000  tons of copper concentrate.

According to the 1997 contract approved under the presidency of Ernesto Pérez Balladares, for the extraction of copper, gold, and silver, the State will receive 2% of the gross sale of each mineral.

Last year, the Supreme Court ruled that contract unconstitutional. According to the MICI, the ruling, to date, has not been enforced, "because a series of memorials presented, on the one hand, by Minera Panama, including clarification and reconsideration against the  ruling and, for  another,by the MICI, which submitted a request for clarification of the ruling, all of which are still awaiting a ruling by the Supreme Court . "



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$6 billion investor in Panama reacts to National Assembly snub


Posted 30/05/2019

Minera Panama  is the biggest private investor   in the history of Panama and is  respectful  of national laws and trusts  in the legal security of the country

 The statement  by the company comes in response to the  Wednesday, May 29 rejection of a contract with the Panama State  by the  Economy and Finance Committee of the National Assembly

"We trust that the State will support the legal stability, necessary to boost the national economy, since, according to the forecasts of national and international experts, we are on track to contribute more than 3% to the growth of Panama's GDP as of 2020, "the company said.

Minera Panama said asserted that its operations in Panama are covered by current legislation, as well as by international investment protection treaties.

9000 employees
The mining conglomerate will continue to develop the Cobre Panama project, which currently employs more than 9,000 Panamanians, who develop and grow alongside the company.

In 2018, the Supreme Court declared unconstitutional the law that granted the concession for the exploitation of gold and copper to Petaquilla Mines now called Minera Panamá.

The Government argued that the ruling does not affect the concession.


http://$6 billion investor in Panama reacts to National Assembly snub

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Legal Certainty in Doubt

The decision of the Legislative Assembly to not endorse the bill that seeks to approve the contract between the government and Minera Panamá, shows the fragility of the contracts between the Panamanian state and companies.

Tuesday, June 4, 2019

The obstacles to the mining project date back several years, since the legal dispute began in 2009, when the Environmental Impact Center (CIAM) filed an appeal of unconstitutionality against the contract granting a 20-year concession to exploit and commercialize the gold, copper and other mineral resources of Cerro Petaquilla.

In October 2018 the contract Law 9 of February 25, 1997 was declared unconstitutional by the Supreme Court of Justice and according to the judicial ruling, the concession would not represent the best interests of the State.

See “Judicial Ruling Against Mining Company” and “Fragile Legal Certainty”.

The issue recently returned to the discussion table, since last May 29, after the negotiation reached the National Assembly, the Legislative Commission on Economy and Finance rejected in its entirety the contract between the State and Sociedad Minera Petaquilla S.A, currently Minera Panamá, arguing that it is "harmful to the country."

Nelson Jackson Palma, deputy president of this legislative body, said that the different communities in and adjacent to the mine are in extreme poverty and so far, have not been benefited, so it is necessary to review this contract more closely, explains a statement from the Assembly.
See full press release.

The president-elect, Laurentino Cortizo, will have to face this dispute. On the subject, he explained to Telemetro.com that "... It will be considered, the review should not take too long, are contracts that have their period. We consider it right that the new government should take on that responsibility, it is important, right now talking about beating the drum that contract is not good.

Cortizo added that "... the issue of legal security will be respected, but he warned that companies have to respect the right to review clauses by clauses in order to comply with contracts."

The business sector rejects these decisions. On the matter Jorge Juan de la Guardia, president of the Cciap, said to Elcapitalfinanciero.com that "... One of Panama's main assets, and which has been a tool to attract international capital, is its legal security; but these decisions send the wrong message to local investors and particularly to those from other latitudes."

See Elcapitalfinanciero.com article "Asamblea Nacional pone en peligro la estabilidad económica y la atracción de inversión extranjera" and the one of Telemetro.com "Cortizo revisará contrato con Minera Panamá 'respetando la seguridad jurídica'."



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First Donosco copper shipment China  bound


Missy Enterprise carries first Minera Panama export

Posted 14/06/2019

The first 31,200 tons of copper concentrate extracted from the  Donsco mine operated by Minera Panama. the local operation of the multinational  First Quantam, left Panama on Friday, June 15.

The copper concentrate is heading to foundry plants in China, aboard the Panamanian flagged ship Missy Enterprise,. The vessel was anchored in the port of Punta Rincon, Donosco built by the mining company to export the material extracted from the land.

The first export will benefit Panama with $1million  in royalties plus the tolls it pays as it passes through the Panama Canal.

The  $6.3 billion investment in the mine puts  First Quantum among the five largest miners in the world.

Outgoing president  Juan Carlos Varela, made his second visit  this year to the plant He was also at Donoso when, in  February, tests were done on the mills that grind the stone that is extracted from one of the three open pit pits

Varela, in the opening ceremony, highlighted that "we are facing the largest private investment  ever in the country."



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Copper Mine Begins Exporting

In Panama, the Canadian company First Quantum, owner of the copper mine in the province of Colon, sent the first vessel with 31,200 tons of copper.

Friday, June 14, 2019

The Panamanian mine whose construction began in 2013 and demanded about $6.3 billion investment, expects to export 320 thousand tons of copper concentrate per year, announced from the beginning of the year that in June would begin to export its product.

You may be interested in “Copper Wire: Purchases up to September 2018

From the First Quantum statement:

Punta Rincón, Colon, June 14, 2019. Hundreds of Panamanian workers, authorities and members of neighboring communities proudly left the port of Punta Rincon, Province of Colon, the Panamanian flag ship that carries the first 31,200 tons of copper concentrate, marking the beginning of exports of this mineral from Panamanian lands.

The export marks the second milestone of the entry into operations of the only Panamanian world-class mine; the first was the celebration of the first milling on February 18.

"Copper is the Future. This copper, 100% Panamanian, will contribute to the world reaching the sustainability required by providing the necessary material for the generation of clean energy; but it also represents the opportunity to offer a future full of opportunities to neighboring communities, to our collaborators and to Panama" said Tristan Pascall, General Manager of Cobre Panama.

Read full statement (In Spanish).



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Panama’s first copper export transits canal


MISSY Enterprise is now on the high seas heading for China.

Posted 23/06/2019

The "Missy Enterprise" transited the Panama Canal on Friday, June 21 carrying the first 31,200 tons of copper concentrate exported from the country.  to the world.

It is the first of a total of twelve projected transits this year which will raise $1.5 million in tolls as the cargoes head for the Asian continent.

The ship began loading the concentrate on Friday, June 14. marking the introduction of Panama as a copper ore exporting country.

The mine is located in Donoso,  Colon, and represents a $6.3 billion investment by Minera Panama, subsidiary of Canadian First Quantum Minerals.

The project has a 300 MW power plant connected to the national electricity grid and in an international port of two terminals in Punta Rincón.

Between 125 and 250 thousand tons per day are processed in the mill, which the company says, is expected to process between 85 and 100 million tons annually.

Among the contributions that the company has made to Panama is the generation of more than 10,000 jobs for Panamanians in its construction phase, It made a contribution of $118 million to the Social Security Fund, in 2018.

In addition to more than $58 million to the sustainable development of the communities of Donoso and La Pintada; it t has also allocated more than $34 million to the country's environmental conservation.



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