Panama's Supreme Court declares 20-year contract for Canadian copper mine unconstitutional

PANAMA CITY — Panama’s Supreme Court ruled unanimously Tuesday that a 20-year concession for a Canadian copper mine that has been the focus of widespread environmental protests was unconstitutional and the president said later a process to close the mine would begin.

Opponents of the Cobre Panama mine argued it would damage a forested coastal area and threaten water supplies. The announcement of the nine-member court's decision after four days of deliberations set off cheers among a crowd of people waiting outside and waving Panamanian flags.

“This is what we had been waiting for,” demonstrator Raisa Banfield said after what she called an agonizing wait. “The president has to suspend (mine) operations today."

Minera Panama, the local subsidiary of Canada’s First Quantum Minerals, which operates the mine in central Panama, said in a statement that “Cobre Panama acknowledges the court’s decision.”

“We want to affirm our unwavering commitment to regulatory compliance in all aspects of our operations within the country,” the company wrote. "We will comment further as additional details on the ruling are made public.”

Panama President Laurentino Cortizo told the nation Tuesday that as soon as his administration formally receives the court's decision it would be published in the official gazette and a process will begin “for an orderly and safe closure of the mine.”

The mine employs thousands and accounts for 3% of Panama’s gross domestic product.

In March, Panama’s legislature reached an agreement with First Quantum allowing Minera Panama to continue operating the huge copper mine for at least 20 more years. The open-pit mine was temporarily closed last year when talks between the government and First Quantum broke down over payments the government wanted.

The contract, given final approval Oct. 20, allowed the subsidiary to continue operating the mine in a biodiverse jungle on the Atlantic coast west of the capital for the next 20 years, with the possibility of extending for a further 20 years if the site remained productive.

The dispute over the mine led to some of Panama's most widespread protests in recent years, including a blockade of the mine’s power plant. Protesters also blocked parts of the Pan American highway, including a stretch near the border with Costa Rica.

Just before the ruling was announced, they opened the roadway so freight trucks could get through.

Minera Panama said in a statement earlier this month that small boats had blocked its port in Colon province, preventing supplies from reaching the mine. Naval police reported that a ship carrying coal decided to turn back due to “hostility from a group of protesters who from their boats threw rocks and blunt homemade objects” before being dispersed.

The protesters, a broad coalition of Panamanians, feared the mine’s impact on nature and especially on the water supply.

After the protests began, the government nearly passed legislation that would have revoked the contract, but it backtracked in a debate in the National Assembly on Nov. 2.

A court decision that declared the contract unconstitutional was the last opportunity for opponents to get it thrown out.

The Canadian government said it respected Tuesday's ruling and was following the contract negotiation closely. In an email, Jean-Pierre J. Godbout, a spokesperson for the government’s Global Affairs Department, said the government “consistently hopes for an agreed solution that is beneficial to all parties.”

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Rob Gillies in Toronto contributed to this report.