PANAMA Law and Practice Contributed by: Roy C Durling, Arias, Fábrega & Fábrega
easements necessary for the project, upon the payment of fair compensation and costs to the affected party. In such instances, title to all sur - face land so taken will vest in the government of Panama, with all necessary rights being granted to the concession holder. Such rights of use will terminate when the concession ends. Concession holders are obviously free to pur - chase lands within and outside the areas of their concessions. These acquisitions will be made on the basis of privately negotiated agreements, without intervention from the government or the need to notify it. These lands will be owned out - right by the concession holder. 1.4 Role of the State in Mining Law and Regulations The Panamanian government has the role of grantor-regulator. In light of the economic poli - cies followed by various governments during the past 25 years, the government is unlikely to assume a different role. In the case of the Cerro Colorado deposit, until recently the state maintained the possibility of eventually becoming an owner-operator in asso - ciation with an experienced mining company (which would manage the project). However, this position was abandoned in 2012 as a result of opposition to the project by local and environ - mental groups, which led to the enactment of legislation banning all types of mining within the Ngäbe-Buglé autonomous region, where Cerro Colorado is located. 1.5 Nature of Mineral Rights According to the Panamanian Constitution, the state owns all mineral deposits in Panama. How - ever, based on the Constitution and the CMR, the government may grant concessions to private individuals for the exploration and extraction of
minerals. In effect, such concessions constitute mineral rights granted to private individuals. The holders of such concessions acquire exclu - sive rights to explore and extract minerals within certain defined areas. The minerals extracted become the property of the concession holders, subject to the payment to the state of royalties, taxes and other duties, as stated in the conces - sion agreements and the law. 1.6 Granting of Mineral Rights The National Directorate of Mineral Resources (NDMR) is a directorate within the Ministry of Commerce and Industries and is the governmen - tal entity in charge of overseeing mining activities throughout the Republic of Panama. According to the CMR, the NDMR handles the granting of mining concessions to private persons and cer - tain governmental entities, and ensures that min - ing is carried out in accordance with the law. The actual granting of a mining concession is done pursuant to a concession contract entered into by the Minister of Commerce and Industries, in representation of the Republic of Panama, and the concession holder. The granting, regulation and overseeing of min - ing activities in Panama is centralised, with the NDMR and the Ministry of the Environment regu - lating mining activities in all parts of the country. Even though the law does not seem to accord much weight to provincial and municipal authori - ties in the regulation of mining activities, in prac - tice, the NDMR and the Ministry of the Environ - ment consult them, and their voice and opinions significantly influence final decisions. The CMR and related laws provide a general framework for the granting of mining conces - sions, which is applicable to all projects and investors. The vast majority of mining conces -
370 CHAMBERS.COM
Powered by FlippingBook