Controversial mining law green-lighted, Panama


Latinamerica Press

Date of publication: 
2 February 2011

In the first of two votes, Panamanian lawmakers Feb. 1 approved a controversial mining law that aims to exponentially expand the sector in the country, a legislation that was staunchly opposed by environmental and indigenous rights groups.

The Ministry of Commerce and Industry currently has more than 180 requests for mining licenses that, if granted, would encompass 40 percent of Panamanian territory.

The proposed law would allow foreign entities or persons to mine in Panama, as well as increase double the royalty fee to US$0.04 per dollar of mining-generated income.

Several environmental and indigenous organizations complain that there has not been enough debate and technical analysis about the ecological and social impact the industry could have.

Canadian company Inmet is developing a $5 billion copper-gold project that would require the relocation of more than 5,000 people, mainly indigenous and campesino villagers near Panama´s northern coast. The project would be the largest in Central America.

President Ricardo Martinelli´s government is also looking for partners to develop the Cerro Colorado copper project in the western Chiriquí province, which would make Panama one of the top copper producers in the Western Hemisphere. According to Martinelli, the mine has more reserves than El Teniente mine, in Chile, the world´s top copper producer.

A year ago, production began at the Molejón gold mine, owned by Canada´s Petaquilla Minerals Ltd., a project that sparked criticism and protests.

In a joint statement by more than a dozen environmental and indigenous groups, signatories expressed “our deepest worry about the process and content of this polemic and nefarious bill that attacks Panama´s environmental security and sovereignty,” referring to the mining bill.

“Particularly worrying is the recalcitrant position of the government representatives by not effectively integrating members of civil society,” said the statement.

They added that the law completely skirts the issue of previous consultation of the indigenous community members affected by potential mining and other investment projects, as is stated in the International Labor Organization´s Convention 169 on Indigenous and Tribal Peoples.

Before the vote, organizations including the National Association for Nature Conservation presented a counter-bill: a moratorium on open-pit mining.

President Laura Chinchilla of Costa Rica, Panamá´s northern neighbor, last year issued a moratorium on open-pit mining over a similar controversy.