Canadian firm First Quantum Minerals on Thursday asked the Panamanian government to suspend the contracts of some 7,000 workers at Central America’s biggest copper mine, due to be closed under a court ruling.
The company said it had been forced to suspend production after road blockades which cut off essential supplies and “has also affected our ability to maintain work activities on site.”
It has therefore asked the labor ministry to suspend the contracts of some 7,000 employees, First Quantum said in a statement. This would allow it to stop paying wages.
On Tuesday, Panama’s Supreme Court ruled unconstitutional a contract awarded to First Quantum.
Panama faced nationwide protests and roadblocks since Congress approved a law in October allowing First Quantum Minerals to operate the copper mine for another 20 years, with an option to extend for another two decades.
Protesters were concerned over the potential environmental impacts of Central America’s largest open-pit copper mine, as well as other terms of the deal.
The protests against the mine deal were the largest since the fall of dictator Manuel Antonio Noriega in 1989. Roadblocks, including of the Pan-American Highway, led to more than $1.7 billion in losses, according to business associations.
The Supreme Court had declared the original mining contract unconstitutional in 2017, but the government argued that a new deal set out a minimum annual contribution from the mining company to the state of $375 million — 10 times more than initially agreed.
In addition, the company and the government said the mine generated 8,000 direct and 40,000 indirect jobs, and would contribute four percent to Panama’s gross domestic product.
Since February 2019, the open-pit mine has been producing about 300,000 tons of copper concentrate per year.
Critics say the mine has wrought destruction on forest areas in a key biological corridor linking Central America and Mexico.
After the contract was invalidated by the Supreme Court on Tuesday, the government said it would close the mine.
The road blockades were subsequently lifted.
First Quantum Minerals, which has invested more than $10 billion dollars in Panama, has notified the government of its intention to “present arbitration claims.”
