PANAMA Law and Practice Contributed by: Roy C Durling, Arias, Fábrega & Fábrega
1. Mining Law: General Framework 1.1 Main Features of the Mining Industry Panama does not have a developed mining industry, even though geological surveys carried out in the early to mid-20th century suggest that it has large deposits of copper, gold, manga - nese, silver and other minerals. For the greater part of its history as an independent nation, mining activity in Panama has been practically restricted to the extraction of materials needed for the construction industry. The above geological surveys indicated that some of the mineral deposits in Panama might be regarded as being world class. Since the late 1960s, international mining companies and other multinational organisations (such as the United Nations) have sponsored further geologi - cal surveys and exploration activities that have confirmed Panama’s mining potential. There are at least two significant copper depos - its in Panama: Cerro Colorado and Cerro Peta - quilla. Cerro Colorado is located on the western part of Panama (formerly part of the Chiriqui and Veraguas provinces, but now part of the Ngäbe-Buglé autonomous region) and is con - sidered one of the largest copper deposits in the world. In the 1980s, Rio Tinto conducted signifi - cant exploration activities in Cerro Colorado, but opposition by local residents and environmental groups prevented the further development of the project, which remains unexploited. Cerro Petaquilla (also known as “Cobre Pan - ama”) is another world-class copper deposit. In the past ten years, First Quantum Minerals Ltd., of Canada, through its Panamanian sub - sidiary Minera Panama, S.A., has invested more than USD6 billion in the construction of mining infrastructure for the exploitation of Cobre Pan -
ama, which started production in 2019 (the first exports of copper took place in June 2019). The Cobre Panama mine is one of the ten largest mining operations in the world. Despite these developments, on 27 November 2023, the Panama Supreme Court unanimously held that the Cobre Panama concession was unconstitutional. With no legal basis to continue operations, Minera Panama, S.A. proceeded to halt mining activities, and the Cobre Panama site is now in care and maintenance. Panama also has important gold deposits. In the 1990s, two gold mines were in operation in the Veraguas province: Mina Santa Rosa and Remance. Between 2010 and 2014, Petaquilla Gold (an affiliate of Petaquilla Minerals Ltd., of Canada) developed the Molejon gold deposit in Cerro Petaquilla (adjoining the copper deposit). There are other untapped gold deposits in Pan - ama, such as the Cerro Quema gold deposit in the Azuero region. Despite all the promising deposits in the country, as a result of the public clamour and protests against metal mining, the government of Pan - ama approved Law 407 of 2023, which estab - lished a ban on new metal mining concessions. As a result of this law, except for some minor metal mining operations in Panama, no further metal mining concessions are to be issued. 1.2 Legal System and Sources of Mining Law The legal system in Panama is based on Euro - pean civil law. Spanish and French laws have had great influence in the development of the Panamanian legal system. Legislation in Panama (including laws applicable to mining activities) is enacted by the National
368 CHAMBERS.COM
Powered by FlippingBook