PANAMA Trends and Developments Contributed by: Roy C Durling, Arias, Fábrega & Fábrega
Although unrelated to the Cobre Panama pro - ject, Orla Mining Ltd., a Canadian company (“Orla”), has also filed a request for arbitration under the Canada-Panama FTA. Orla, through a Panamanian subsidiary, was in the process of renewing three gold concessions in Cerro Que - ma, Panama. As a result of Law 407, the gov - ernment of Panama rejected its applications to renew the concessions. Orla is seeking USD400 million in damages. In 2024, the Panamanian economy is expected to slow down, due in part to the closure of the Cobre Panama project. In the first months of 2023, the GDP grew at a rate of 8.2%, whilst in the same period in 2024, the rate of growth was 2.2%. In March 2024, Fitch Ratings down - graded Panama’s sovereign debt to junk status in part as a consequence of the closure of Cobre Panama. Conclusion In the meantime, José Raúl Mulino was elect - ed President on 5 May 2024. A new National Assembly was also elected. The new President was inaugurated on 1 July 2024.
The new government has said that it will address the Cobre Panama problem in 2025. The gov - ernment is currently addressing the economic problems of the Social Security Administration. Mr Mulino has indicated that, if left unattended, the mine could be an environmental disaster. He has also suggested the possibility of temporarily restarting mining operations at Cobre Panama to generate sufficient revenue for the proper closure of the project. The President has indi - cated that his government will move carefully, respecting the decision of the Supreme Court, while avoiding environmental damage and pub - lic unrest. The government is currently assessing the value of the copper ore left in the mine (estimated at 120,000 tonnes) and the possibility of exporting it. It is also anticipated that the government will request an environmental audit of the project. 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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