Panama’s Parliament terminated Minera Panama’s extended contract, impacting the Canadian mining firm, First Quantum Minerals.
They will not mine copper for another 20 years as planned. Public protests grew when President Cortizo okayed the deal on October 20.
Groups for social, labor, and environmental rights said the contract hurt Panama and kept illegal terms from an old deal.
The Supreme Court had declared these terms unconstitutional.
Meanwhile, Zulay Rodríguez, a lawmaker, revealed Minera Panama extracted valuable minerals since 2021 without paying Panama.
The protests led to 816 arrests, including 106 youths. Amid this, President Cortizo declared a vote to decide First Quantum’s future in Panama.
Investors worry this may lead to political uncertainty, causing First Quantum’s shares to fall sharply.
First Quantum’s stock kept falling for three days. On Wednesday, it dropped 12.6%. The company’s value has nearly halved in just one week.
The mine is key for First Quantum, producing 45% of its copper in 2022. Now, analysts expect the stock might drop more if the contract ends.
Analysis
This contract halt is a big change for Panama, showing a preference for local over global deals.
Mining has often caused debates in Panama about the environment and profits. The Cobre Panama mine is central to this issue.
The protests are part of a larger pattern where people ask for more from big international companies.
Panama’s choice to have a referendum shows a democratic way to handle public disagreement. This could lead to new ways of making and handling deals for resources.