Panama Copper Mine, a multi-billion dollar investment with environmental complaints and poor oversight
The controversial Panama Copper Mine project -in which the powerful international group First Quantum Minerals has invested US$10 billion in the last ten years, according to its reports- is on hold.
This is because it has been immersed since last December, when the deadline for signing the contract expired, in a confrontation with the Panamanian government demanding more royalties for the exploitation of the mineral.
At present, First Quantum has stopped its operations in Panama. But the problems for the mine go beyond how much the country receives.
Bloomberg Línea reviewed more than a hundred documents on such investigations by the Ministry of Environment (MiAmbiente) and Panamanian authorities, such as the Public Prosecutor’s Office, and found new inquiries.
Some may even have a criminal effect on this exploitation, contributing 4.8% to the Panamanian GDP and generating 40,000 direct and indirect jobs.
As a result of the exploitation called Cobre Panama, the Public Prosecutor’s Office has six ongoing investigations for possible damage to the environment, historical heritage, and public administration and has received 11 complaints.
The most recent complaint related to the project was filed on February 1 by the Centro de Incidencia Ambiental against the Minister and former Minister of Commerce, Federico Alfaro, and Ramón Martínez, respectively, for allowing copper extraction despite the ruling of the Supreme Court of Justice that declared the contract with the mining company unconstitutional.
It is worth remembering that in 2020 ten administrative processes of the Ministry of Environment were concluded, totaling sanctions for only USD$21 thousand in the exploration and construction stage; there are another five processes in progress in the ministry and one that is being settled in the Supreme Court of Justice.
Since last December 15, the State ordered to cease the operation and only take care of the facilities after failing to negotiate the new contract because it was declared unconstitutional in 2017.
To contribute an annual minimum of US$375 million, without conditions, when it currently pays a 2% royalty was unacceptable for First Quantum, which has seven mines in the production stage in the world and faces Panama with two arbitrations.
“The Government insists on renegotiating the contract, putting all the balls in a basket where only the economy is valued. We insist that if the project was environmentally unsustainable before, now it continues to be so, there is no way to reconcile the destruction and environmental degradation of 12,000 hectares”, the connectivity of the ecosystems and the functionality of the corridor are not compensated, together with the “deficient” supervision and the company’s repeated non-compliance, warned Isaías Ramos, biologist of the NGO Centro de Incidencia Ambiental (Ciam).
COMPLAINTS OF WATER CONTAMINATION CONTINUE
In December 2022, the residents of San Benito, a community 5 kilometers from the mine, saw, once again, that the river they use for their basic needs changed color, but in 2022 there was no inspection due to a lack of resources from the Ministry of the Environment.
“It is a creek that comes out near the mining areas, it was about eight days, and we made a report to the company that [the water] looked dark, white, and milky,” farmer Gregorio González described to Bloomberg Línea.
Other reports from 2021 from the Ministry of Environment detail the recidivism in the discharge of wastewater without a permit and that tires from heavy equipment have been disposed of in the project area without authorization since 2016, and highlight that it is harmful because the mine is located in the Mesoamerican Biological Corridor.
The mining company, for its part, replied that they have the permits.
Despite the official documents, according to the mining company, the disposal of tires is not a breach but a mitigation measure accepted by the ministry.
In 2021, the mining company had a second spill of liquids from the operation, water with sediment for 15 minutes that went to the tailing ponds, an additional event to the incident of July 2021, whose images of the river with a whitish tone alerted that tailing water affected the tributary of the populations adjacent to the mine.
In the inspection for this incident, more than 40 “large” bags of the chemical process to separate the minerals were also detected, affecting the Chicheme stream.
“Accidental discharges maintain a constant risk due to high rainfall” and the relief at the headwaters of rivers, the report cites.
The hanging bridges that should have been in place since the beginning of the project had not been installed, even though ten years had passed since construction and operation, which would cause “an imbalance in the traffic of arboreal fauna”.
But, according to the mining company, they were designed before 2021 and are in operation.
NO AUDIT OF FINANCIAL COMMITMENTS
The ministry recommended, in 2021, to audit “all the financial commitments” of the company, but to date, this has not been done.
There is not a single letter or process in the reports for the 2,000 hectares First Quantum occupies for its tailings dam outside the perimeter of its concession.
“They took it … so they have it, so obviously that area had to be recognized,” said Environment Minister Milciades Concepción in an interview with Bloomberg Línea.
There wasn’t any procedure to claim the US$11.6 million that the company owes for the ecological parks in the zone and areas adjacent to the project, a fact that Concepción reiterated in his appearance at the National Assembly.
Still, according to the mining company, it was executed according to what was agreed with the State.
QUESTIONS ABOUT THE CARE OF THE FAUNA
In 2021, the last environmental inspections were carried out in this district, where biodiversity “is of transcendental importance” due to its strategic position in the Atlantic, forests that “provide refuge to more than 650 species of flora and fauna, most of them threatened, rare, regional endemic, bi-national, national, of restricted distribution, and with vulnerable populations and in danger of extinction”, according to the resolution that created the protected area of Donoso in 2009.
To preserve them, the veterinary clinic is reduced to a container and a cage 3 meters high, in which only first aid is provided, without a laboratory and with an inoperative X-ray machine,
“it lacks equipment and human resources to monitor these species,” according to the biodiversity report of the Ministry of Environment (Miambiente).
It is “very worrying”, says the Miambiente report, that before clearing, only species of “priority interest” are rescued, adds the ministry, because the biodiversity plan was modified and even the inspecting entity lacked the latter when inspecting.
FIRST QUANTUM RESPONSE
First Quantum responded that “it is false” that the flora and fauna rescue plan has been modified” and that they focus their efforts on “species of interest” because of their restricted population, but they rescue all the fauna, relocating more than 47,000 animals of 600 different species.
The Ministry of Environment promised, since January, to answer Bloomberg Linea the reason why there was this change in the biodiversity plan – according to official documents – to deliver it and give the reason why the regional authority did not have it at the time of the inspection but did not answer.
As stated above, First Quantum denied all allegations and mentioned that the monitoring program of the rivers around the project shows that the conditions are in the expected range and that Cobre Panama is part of the Community Participatory Monitoring program through independent organizations involving 11 communities.
“Our commitment to biodiversity conservation is constant,” and it is manifested in the investment of resources in a laboratory for micropropagation for species of interest of the native flora of Panama that will be part of the restoration program, which generates the technical and scientific capacity for Panama and even for Mesoamerica.
Past publications of La Prensa newspaper revealed some 200 non-compliances in 13 official environmental monitoring reports from construction to copper exports (2012-2019) that describe recidivism in erosion control, discharges of domestic and waste water without permits which affected water and soil due to erosion and sediments, among other points.
For its part, the mining company emphasizes that a finding does not imply non-compliance and, despite what is mentioned in the reports, “there are no repeated non-compliances” and that the rehabilitation of the mine area complies with Panamanian legislation and the environmental, health and mining safety guidelines of the International Finance Corporation (IFC).
While the conversation remains on the economic contribution, and the mine has stopped processing copper since last Thursday, February 23, the scientific and environmental community demands a debate and review of the ecological aspects, which at the moment in Panama is kept out of the dialogue.
With information from Bloomberg
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