The Government of Panama has rejected Canadian mining company Orla Mining’s requests for three mining concessions, including the Cerro Quema project.
The Panamanian Ministry of Commerce and Industry (MICI) had cancelled the concessions and declared the area falling under the project a reserve area.
Located in Azuero Peninsula, in Los Santos province, the Cerro Quema project occupies 15,000ha of land with a copper-gold zone discovery. A pre-feasibility study on the project was completed in July 2021.
It is an open-pit heap leach mine, copper-gold sulphide project with various exploration targets.
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By GlobalData
The company claims to have invested around $120m in the country to date. If built, the project could have created jobs and skills development opportunities, while also contributing to tax, royalty and other fiscal benefits to the government, the company stated in a press release.
Orla stated that it will continue monitoring developments in the country, which are uncertain at the moment and are evolving quickly.
It also said that it will explore all legal remedies available to protect its investments and unlock value for its shareholders, and take measures under international law.
It is noted that a newly passed law, Law 407 by Panama’s National Assembly, has introduced a moratorium on the grants, renewals and extension of concessions on exploration, extraction, transportation and exploitation of metal mining in the country.
The company’s subsidiary had recently received resolutions from the ministry that sought to cancel the concessions after they have expired and classify them as an under reserve area.
The ministry has also been prohibited from granting mining concessions for exploration or extraction in reserve areas.
Last month, the Supreme Court of Panama ruled as unconstitutional First Quantum’s contract to operate the Cobre Panama copper mine.
Protests broke out after the government awarded First Quantum’s subsidiary, Minera Panama, a contract with a right to mine copper for 20 years. Protestors demanded that the country be free of mining as it can harm the ecosystem.
This mine produced around 1.5% of the world’s copper supply last year and also contributed to around 40% of the company’s revenues.
