Chile advising Panama on closure of flagship copper mine

Panama is receiving support from the Chilean government to carry out the closure plan for the flagship Cobre Panamá mine owned by First Quantum Minerals, after the supreme court declared in November that its contract was unconstitutional.

“I appreciate the collaboration of Chile, whose extensive experience strengthens the process both technically and in socio-environmental aspects,” trade and industry minister Jorge Rivera Staff said on social media.

“The government of Chile has legal standards for closure, closure guides for small and large mines, as well as mining guarantees, factors that have been learned and adjusted over time,” the ministry said in a statement.

Last week, the ministry reported that an intergovernmental committee had conducted a technical inspection of the mine to ensure compliance with the environmental preservation and safe management plan, in which it assessed aspects of public safety, management of hazardous materials and the status of the process plant.

This came after Minera Panamá, the local operator of the mine, warned of risks to health and the environment due to the prolonged storage of copper concentrate at the facilities as it awaited authorization to export the material and thus defray part of the costs of the closure plan.

The company committed to using the proceeds from the sale of the concentrate to cover the costs of the site's preservation and safe management plan, which First Quantum estimates at US$15-20mn per month.

Rivera told local press that there is a possibility that the State will face five international arbitration cases filed by First Quantum and Orla Mining, a company that operated three concessions of the Cerro Quema gold mining project.  

Last December, the trade and industry ministry rejected Orla's request for an extension of the three Cerro Quema concessions and retroactively declared them canceled. 

"In relation to the closure of the operations of the Cobre Panamá mine, at this time we have four intentions for arbitration communicated to the republic of Panama on the issue of investment and there is another in process on the commercial issue. One intention of arbitration was also received on the part of Cerro Quema investors," Rivera was quoted as saying by local online paper En Segundos.