{"id":9550,"date":"2023-11-04T12:11:44","date_gmt":"2023-11-04T12:11:44","guid":{"rendered":"https:\/\/infundpros.com\/business\/mass-protests-over-copper-mine-risk-panamas-business-friendly-image\/"},"modified":"2023-11-04T12:11:44","modified_gmt":"2023-11-04T12:11:44","slug":"mass-protests-over-copper-mine-risk-panamas-business-friendly-image","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=9550","title":{"rendered":"Mass protests over copper mine risk Panama\u2019s business-friendly image"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=bdc8d6f3-cff6-478e-8155-6b3ff5b8a869\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Swelling protests in Panama against a large copper mine have shocked politicians and investors, with the strength of opposition to the project and the government response casting a cloud over the country\u2019s investor-friendly reputation.<\/p>\n<p>The open pit mine, owned by Canada\u2019s First Quantum Minerals, is one of the world\u2019s largest sources of copper and has faced multiple legal challenges. Thousands took to the streets of Panama City to protest after congress approved a renegotiated contract for the project last month.<\/p>\n<p>A broad group bolstered by labour unions, students and indigenous groups has repeatedly demonstrated across the country, closing roads as they carried national flags and signs saying \u201cenough of destroying our land\u201d.<\/p>\n<p>The visible fury put pressure on President Laurentino Cortizo\u2019s government, which has promised a referendum on whether to cancel the 20-year contract for the mine, which accounts for almost 5 per cent of gross domestic product.<\/p>\n<p>Congress this week banned all new metals mining concessions after holding emergency sessions, but this will not affect the existing contract.<\/p>\n<p>\u201cWe won\u2019t stop until the mining law is struck down,\u201d teachers\u2019 union leader \u00c1lvaro del Cid told local television at a protest this week, referring to legislation approving First Quantum\u2019s latest contract.<\/p>\n<p>Mining has long been controversial over its environmental impact and perceptions of corruption, but the protests were also fuelled by high living costs and an unpopular government, said Orlando P\u00e9rez, professor of political science at the University of North Texas at Dallas.<\/p>\n<p>\u201cThis issue is not new, but it has now lit the match over a large woodpile of grievances,\u201d P\u00e9rez said.<\/p>\n<p>\u201cIt could [scare] investors, particularly for other extractive industries, if investors start doubting how secure the Panamanian legal and political environment is.\u201d<\/p>\n<p>Over the past three decades Panama has grown more than 5 per cent per year on average, slashing poverty rates and bucking lacklustre economic trends in a region plagued by instability. <\/p>\n<p>But the economic progress belies anger over political corruption and inequality. In recent weeks, that fused with worry, especially among younger Panamanians, about climate change as the country\u2019s canal suffers record droughts.<\/p>\n<p>\u201cWhat young people are saying is that they want a model that isn\u2019t an extractivist model,\u201d said Brooke Alfaro Hart, chair of the board of environmental non-profit Centro de Incidencia Ambiental. <\/p>\n<p>Rating agency Moody\u2019s this week downgraded Panama\u2019s debt to Baa3 from Baa2 \u2014 the lowest investment-grade rating \u2014 citing structural fiscal problems but also noting social and political tensions.<\/p>\n<p>The possibility of Panama losing its investment-grade rating went from a \u201ctail risk\u201d to a \u201csizeable risk\u201d after the protests and referendum call, said analysts at JPMorgan.<\/p>\n<p>\u201cIf the contract is revoked, we think that the probability that Panama loses its investment-grade rating in the short term rises significantly, as lower trust in the country\u2019s institutional framework would likely drive in lower investment and lower medium-term growth,\u201d they added.<\/p>\n<p>The analysts said it was more likely that the mine deal would be renegotiated, handed to another company or taken under state control rather than shut down.<\/p>\n<p>The project\u2019s opponents argue the original 1990s concession \u2014 awarded to a different company \u2014 was unconstitutional because it lacked an open bidding process. They also allege the process to approve the latest contract was illegal and possibly corrupt.<\/p>\n<p>First Quantum, one of the world\u2019s largest copper producers, has said it operates in an environmentally sensitive manner and that the mine has directly and indirectly created more than 40,000 jobs with more than $10bn invested. It said on Friday it was confident with respect to its legal position and conforms to high standards of ethical behaviour.<\/p>\n<p>About half of the company\u2019s 750,000 tonnes of annual production comes from the flagship Cobre Panama mine in a rural, little-populated area near the Caribbean coast. First Quantum\u2019s market capitalisation dropped more than a third this week.<\/p>\n<p>Mackenzie Davis, managing partner at SailingStone Capital Partners and an investor in First Quantum, said maintaining rule of law and due process were essential for attracting foreign investment.<\/p>\n<p>\u201cI appreciate that there are concerns about the mining industry\u2009.\u2009.\u2009.\u2009But the reality is that we need the raw materials and we need the raw materials to be produced as responsibly as possible.\u201d<\/p>\n<p>Mining industry executives widely lament that despite huge expected demand for copper, partly from the green energy transition, it is becoming more difficult to develop multibillion-dollar projects for reasons including troubled community relations and unstable government policy.<\/p>\n<p>Presidential elections are due in Panama next year, with former president Ricardo Martinelli, who faces a 10-year prison sentence for money laundering, far ahead in the polls.<\/p>\n<p><em>Additional reporting by Harry Dempsey in London<\/em><\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/bdc8d6f3-cff6-478e-8155-6b3ff5b8a869\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Swelling protests&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-9550","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Mass protests over copper mine risk Panama\u2019s business-friendly image | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Swelling protests in Panama\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=9550\" \/>\n<meta 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