The contract still needs to be ratified by the Comptroller General and Parliament before its promulgation by the Executive. Among other things, it authorizes a 20-year, renewable mining concession and sets up a minimum income of $375 million for the National Treasury, as well as broad monitoring powers of the operation by state authorities.
The Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) also released a statement related to the new contract saying that, based on the difficulties First Quantum Minerals and the government went through to get to this point, it is important to develop a new Mining Code.
“The country needs to define a mining policy through a new Mining Code, which should establish specific parameters for metallic and non-metallic mining, leaving behind obsolete practices and proposing mechanisms to carry out responsible mining. Such mechanisms should be reviewed and updated on an ongoing basis so that we can move toward the modernization of the industry,” CCIAP’s statement reads.
In the view of the Chamber of Commerce, the government’s relationship with the mining industry shouldn’t be taken lightly and must be based on solid knowledge of the sector and technical advice.
“The first step is to rigorously complete the process related to the current contract, looking after the best interest of the country and its citizens. Let us prevent populist or electoral interests from intervening in said process,” the communiqué states.
Another project on the spotlight
Although not explicitly, CCIAP’s release pointed to another mining development making headlines.
Orla Mining’s (TSX: OLA) (NYSE: ORLA) Cerro Quema project recently received approval for its environmental impact assessment and the news has generated a polarized debate.
On the one hand, environmentalists are pushing against Cerro Quema and have expressed concerns about the potential negative impacts the project could have on the southwestern Azuero region. They have also raised suspicion about the timing of the approval, which coincides with a political crisis that has former president Ricardo Martinelli and 14 other politicians and businesspeople on trial for alleged money laundering.
On the other hand, in the same communiqué in which it welcomed Cobre Panama’s contract ratification by the Cabinet, the Mining Chamber also applauded the approval of Cerro Quema’s EIA.
“This is a fundamental milestone that every mining project must complete. This particular one has included a thorough review and verification, by the authorities, of its environmental, social and economic commitments to ensure adequate prevention, protection, mitigation and compensation based on the location of the project,” the statement reads.
Cerro Quema sits on the Azuero Peninsula. It is an oxide heap-leach gold project containing 560,000 ounces of total probable reserves (21.7 Mt at 0.80 g/t).
The 2021 PFS contemplates an open-pit operation capable of producing 81,000 oz per year over a six-year mine life, recovering 489,000 oz of gold. The project will be developed in multiple phases, with ore mined from the La Pava and Quema-Quemita pits.
