Panama approves second metallic mining extraction amidst voices of rejection

By Mary Trini Zea

A second open-pit metallic mining project, this time for the exploitation of gold and silver, enters the Panamanian mining development equation approved by the authorities, despite the voices of rejection of more than 70 organizations and independent signatories.

It is the Cerro Quema mining project, led by the Canadian company Orla Mining Ltd. through its subsidiary, the Panamanian company Minera Cerro Quema, S.A., an operation within a concession of 15,000 hectares in the province of Los Santos, in the Azuero peninsula, in the South of Panama.

According to the company’s pre-feasibility studies, quoted by the Orla Mining Ltd. website, the operation has a useful life of 6 years to recover 489,000 ounces of gold and 399,000 ounces of silver, and an average annual production of 81,000 ounces of gold is estimated.

For said metallic mining extraction -which is located in the Tonosí and Macaracas districts- an investment of US$211,685,000 is estimated, which includes pre-production capital, exploitation, and initial backfill, as well as maintenance and processing of the mine, according to the costs as of 2021 detailed in its environmental impact assessment (EIA).
Environmental controversy

This June 5, when the environmental day is celebrated, those opposed to the mining project demonstrated outside the Ministry of Environment in the capital city, pointing out that the area where the open pit project is to be developed, which will impact 480 hectares, is a place where there are already problems of access to water and where the country’s livestock activity is also developed.

“It will cause environmental impacts that will damage and contaminate our rivers with hazardous chemicals, causing human exposure to harmful pollutants, affecting the quality of life of the population, and will damage our agriculture, our source of work and food for the neighboring population,” said the association of agricultural producers, Ganaderos al Rescate.

The livestock guild questioned the country’s economic development model, in which, after the economic crisis due to Covid-19, metallic mining occupies a “place of importance to the detriment of the agricultural and industrial sector, among others” and “without debate or consultation”.

“Metallic mining is neither viable nor sustainable in a country as rich in water and biodiversity as Panama”, said the Catholic Church through the Diocese of Chitre, a district located in the center of the Azuero peninsula, which signed a statement in conjunction with the Mesoamerican Ecological Ecclesial Ecclesial Network and the Social Pastoral Caritas Panama.

The communiqué of the religious community says that the country is living amid a great drought, and the production, the operation of the Canal, and the lives of the people are endangered.

The Cerro Quema area is rich in water, with rivers that could be contaminated by the chemicals used in the mine. There is an additional danger because the mine is in an important seismic area. Since 1997 the population has opposed the project but has been ignored, so they requested that the project be prevented, reads the document.

Among the rejection arguments of the Centro de Incidencia Ambiental is that the mining company’s closure plan is three years with five years of monitoring.

However, studies cited by the environmental NGO indicate that acid drainage can occur from zero to 15 years, so there is a possibility that such drainage will be generated when the company has withdrawn.

The mining company states that it is committed to “developing good, responsible mining practices, an initiative that forms the central basis of our decisions, and this commitment extends to all the company’s employees”.

In this way, Minera Cerro Quema, S.A. “designs, builds and operates its facilities following the highest environmental, health and safety standards, promoting practices to ensure good health and efficient compliance with safety standards in all its programs and activities,” according to corporate communications on social networks.

It adds that it “acts in its projects with the most efficient methodology in the industry, responsibly applying the cleanest production standards to extract the product and process it efficiently, respecting good practices in environmental matters, in adherence to the laws of Panama and maintaining close relations with neighboring communities.”

MINING BACKGROUND

With this project, which already has the Government’s approval to operate, there are now two open-pit metallic mineral extraction operations.

The other mine in the operational phase is the copper mine in the mountains of Colón.

Its contract, renegotiated by the Government after a controversy with First Quantum Minerals, awaits approval in the National Assembly because the Supreme Court of Justice declared it unconstitutional on December 21, 2017.

This last copper project has had ten administrative processes adding fines of just US$21,000.

At the criminal level, there are six ongoing investigations for possible damages.

Hence, civil organizations question the ability of the authorities to supervise this industry since some 200 breaches of their environmental commitments have been counted.

Meanwhile, in the Bicentennial Pact, a year-long dialogue called by the President of the Republic, Laurentino Cortizo, for Panamanians to contribute ideas and consensus on the country’s various problems, it was agreed to establish a “moratorium on metallic mining in Panama”, a commitment that has not been honored by the Executive.

With information from Bloomberg

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