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Intel Brief: Protests are putting at risk Panama’s foreign investor-friendly image


Panama map

Date: 08/11/2023

Where: Panama

Who’s involved: Panamanian President Laurentino Cortizo, Panama Supreme Court Canada-based First Quantum Minerals, and Panamanian civil society.

What happened?

  • Since 20/10/2023, Panama has been experiencing a growing wave of protests triggered by the signing of a contract granted by Panamanian President Laurentino Cortizo to the Canada-based First Quantum Minerals mining company to operate in Cobre Panama copper mine, the largest in Central America.

  • The contract allows First Quantum Minerals’ local subsidiary company, Minera Panama, to operate for 20 years, with the option to extend for another two decades. Also, the 20-year contract guarantees an annual income of $375 million to the Panamanian government, which represents 4.8% of Panama’s gross domestic product.

  • The first Cobre Panama mine exploitation contract dates back to 1997, later declared unconstitutional in 2017 by the Supreme Court. The mine, in 2013, was acquired by First Quantum Minerals, which has operated there ever since, despite the absence of a contract. The mine was temporarily closed in December 2022.

  • At the announcement of the new contract, thousands of people took to the streets of Panama City to protest against the exploitation of the country’s natural resources and the possible environmental consequences. The mine has, indeed, long been a cause for concern over its environmental impact due to its high water usage. Following the protests, First Quantum Minerals issued a statement announcing its climate change mitigation strategy, using advanced technologies to achieve a 30% reduction of emissions by 2025 and 50% by 2030.

  • The protests are also motivated by discontent against the government and social inequalities. Protesters are concerned about concessions that favor the exploitation of the country's resources by foreign companies rather than prioritizing local enterprises. Moreover, negotiations between the government and the Canadian mining giant have been perceived as non-transparent and with no public input. Key actors, such as indigenous communities, have been excluded from the talks. Also, allegations of corruption against the lawmakers have been made.

  • Since the start of the protests, about 900 protesters, including 117 minors, have been arrested for vandalism and damage to private property and government buildings. In clashes between security forces and protesters, numerous people have been injured, including at least 39 police officers.

  • In response, President Cortizo announced a referendum, to be held on 17 December 2023, on whether to revoke the contract with First Quantum Minerals. On Friday, 03/11/2023, Panama’s Parliament approved an indefinite ban on new contracts for metal exportation and extraction, stopping ongoing proceedings of 103 mining concessions that were under review to be halted and 15 other existing contracts to be renewed. However, the ban will not apply to the already signed agreement with First Quantum Minerals. The constitutionality of the deal with the Canadian company will be assessed by Panama’s Supreme Court.

  • The announcement of the referendum and the uncertainty over the future of mining concessions resulted in wiping out First Quantum Minerals' shares and market value by 40%.


  • The Cobre Panama mine is the largest and only active copper mine in Central America. It comprises two open pit mines, two power stations, and a port. At its full capacity, the mine can produce more than 300,000 tons of copper annually. Gold, silver, and molybdenum are also found on-site. The mine production accounts for about 1.5% of the global copper supply.

  • First Quantum Minerals’ procedures appear to comply with environmental protection regulations. The mining company is also responsible for creating about 40,000 jobs in Panama over the years and has invested approximately $10 billion in the country.

  • The Panamanian government’s stance on the matter and the eventuality that the December 17 referendum will result in the annulment of the contract with the Canadian company is putting at risk Panama’s reputation as an investor-friendly haven. Besides a severe devaluation of First Quantum Minerals, the ongoing protests and authorities' hesitations could discourage current and future investors, severely affecting the Panamanian economy. The referendum could lead to more restrictive laws on mining concessions and foreign companies’ access, as occurs in other countries in the region, such as Costa Rica and El Salvador.

  • Environmental concerns underlie attempts to close the Canadian-owned copper mine. Civil society organizations oppose this project, which is considered non-sustainable for a country with such environmental vulnerability and vast biodiversity and water resources as Panama. Protesters also claim that open-pit mining activities negatively affect other pivotal sectors of the Panamanian economy, namely tourism, agriculture, rice production, and livestock farming.

  • The protests suggest a widespread dissatisfaction with the government’s performance and are driven partly by social inequality, deteriorating living conditions, and a high unemployment rate. The social unrest comes at a delicate time for the Panamanian government. The next presidential election is scheduled for May 2024, and former President Martinelli (2009-2014) appears ahead in the polls, albeit being sentenced to 10 years for money laundering. Due to constitutional limitations, President Cortizo is not eligible for a second consecutive term.

  • Civil society representatives announced that the protests would not stop until the termination of the mining contract with the Canadian company or the nationalization of the Cobre Panama mine. For now, the government has not commented on the possibility of nationalizing the mining complex.

  • Even though President Cortizo has called for a referendum, it is still uncertain whether the vote can be considered legal. Indeed, the Electoral Tribunal of Panama has stated that the issue would require the approval of a law by Congress rather than a national vote. The legality and feasibility of the referendum are still under review.

  • The government of Panama allowed the mine to operate while negotiations were ongoing. If the Supreme Court finds the contract unconstitutional and passes a new mining concession law, the contract with First Quantum Minerals could be terminated or renegotiated. Without the Supreme Court’s ruling, any unilateral termination by the government could be a violation of the contract and necessitate international arbitration.


Mass protests over the concession of the largest Central America copper mine to Canada-based company First Quantum Minerals pose multiple challenges to the Panamanian government. The protests are unlikely to subside without achieving the termination of the contract with the Vancouver-based mining company and an escalation of the demonstrations could cause further violence in the country. Continued turmoil could also adversely affect the tourism sector. At the same time, however, not only could the cancellation of the contract with First Quantum Minerals have legal repercussions for the Central American country, but it could also damage Panama’s foreign business-friendly reputation. Should the December 2023 referendum cancel the contract with First Quantum Minerals and approve the revision of mining concessions laws in favor of more restrictive measures, it could be a major disincentive to foreign investment, severely damaging Panama’s economy and trade relations.



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