Canadian mining company First Quantum is projected to incur an estimated cost of approximately $800 million for the closure of its copper mine in Panama, as disclosed by Trade and Industry Minister Jorge Rivera on Wednesday.
The Panamanian government, through an inter-ministry coalition tasked with formulating the mine’s closure plan, is exploring alternative avenues to recover funds, aiming to prevent the financial burden from falling on the state’s resources, Rivera informed journalists.
The decision to shut down the mine was prompted by nationwide protests advocating for enhanced environmental safeguards and a court ruling declaring the mine’s operational contract unconstitutional, leading to the closure order issued by Panama’s government in December.
The responsibility for funding the closure process remains uncertain, with suggestions from the Panamanian government proposing that First Quantum’s local unit provide financial assurances to cover the expenses associated with closing the profitable copper mine.
Minister Rivera indicated that the development of a comprehensive closure plan for the mine could span between six to eight months, coinciding with Panama’s upcoming elections in May, where the newly elected president will oversee its implementation.
Accounting for approximately 5% of the country’s GDP, the mine’s closure is anticipated to impact Panama’s economic growth, with projections from the International Monetary Fund (IMF) forecasting a slowdown in growth to 2.5% in 2024 from the previous 7.5% due to the cessation of mining activities.