PANAMA Law and Practice Contributed by: Roy C Durling, Arias, Fábrega & Fábrega
Several complaints were filed with the Supreme Court challenging the constitutionality of Law 406. On 27 November 2023, the Supreme Court unanimously held that Law 406 was unconsti - tutional because it had breached not less than 25 articles in the Constitution. As a result of this decision, the Cobre Panama project ceased mining operations. First Quantum Minerals Ltd. (through its Panamanian subsidiary, Minera Pan - ama, S.A.) claims to be spending at least USD13 million per month on the care and maintenance of the site. In addition, whilst the new contract-law was being considered by the National Assembly, the country was shaken by protests against Cobre Panama and the proposed contract-law. To try to calm the protests, the government was com - pelled to introduce a ban on new metal conces - sions (Law 407 of 2023), which also extends to applications for mining concessions that were in the process of review. As a consequence of the 27 November 2023 Supreme Court ruling and Law 407 of 2023, some of the affected companies (including First Quantum Minerals Ltd.) have either taken or threatened to take Panama to international arbi- tration. Some of the claims by these companies are in the billions of dollars.
On 1 July 2024, Jose Raul Mulino was sworn in as President of Panama. On that date, a new National Assembly was also installed. The new government has indicated that Cobre Panama cannot be left unattended because of the risk of severe environmental damage to the area. The President has suggested the possibil - ity of temporarily restarting mining operations at Cobre Panama to generate sufficient revenue for the proper closure of the project. The govern - ment has indicated that the issues relating to the Cobre Panama project will be revisited in 2025. We will have to wait until 2025 to find out how the new government will address the consequences of the termination of the Cobre Panama project and the ban on metal mining concessions.
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