Thousands of Panamanians have taken to the streets to protest against the extension of a contract that would allow a Canadian company to continue extracting copper from a mine located in a protected biological corridor. The capital and other parts of the Central American country have been operating in semi-paralysis for two weeks and the tourism sector alone has accumulated nearly 200 million dollars in losses. The pressure rises and the protesters’ objective is clear: the extractive policy must end to protect the environment, which is why they demand the cancellation of the contract.
On the other side of the protest is the market, which is also responding to the movement against climate change. To reduce carbon emissions, politicians and rulers in many countries propose migrating to cars and machinery that operate with electricity, instead of gasoline, since it can be powered by renewable or cleaner sources. Due to its high conductivity, copper has become a key component in this energy transition, which is why demand is estimated to rise 20% by 2035.
The protests in Panama, experts say, should be read as more than an isolated reaction to a classic conflict between extractive companies and local communities. This is a story destined to repeat itself in countries where there is no deep-rooted mining culture, prompting a complex debate about the global benefits of electrification and the destination of the revenues that will be generated in its wake.
Automotive companies such as Tesla, as well as renewable energy and electricity companies, already have Panamanian copper. The Canadian company that has been operating the mine since 1997, First Quantum Minerals (FQM), informed clients last year that it estimated production of between 370,000 to 400,000 tons of copper from its mine in the Central American country by 2024. “Panama is an important contributor to the global production of copper mines and in 2022 it was the fourteenth global producer of copper mines,” Ana Rebelo, director of analysis and statistics of the International Copper Study Group (ICSG), said by email. its acronym in English), an intergovernmental organization based in Portugal.
“There has not yet been any announcement about a pause in Panama’s Copper production since, as I understand it, discussions are still continuing in Congress,” Rebelo stated. “In the event that the Panama Cobre mine had to be temporarily stopped, it would of course affect our global mining production forecast for 2024.”
Protests broke out on October 20, when Congress fast-tracked the law granting an extension of up to 40 years to the contract with the local FQM subsidiary, which the president immediately signed into law. One of the arguments is that a public consultation was not carried out, so the Supreme Court should declare it unconstitutional. Four lawyers have processed the corresponding appeals, so the Court’s ruling is now awaited.
“This is an example of what is going to happen more frequently in the future, given that the demand for copper is going to increase and therefore we are going to need to open more mines,” says Adrián Duhalt, research scholar at the Center for Energy Policy. Global from Columbia University in New York. “What you are seeing in Panama, I anticipate that we are going to see more examples of those in countries with similar contexts, such as in the rest of Central America, in Africa, in some countries in South America.”
In countries like Chile, the academic points out, where mining is a long-standing economic activity, extraction is “socially accepted” to a certain extent. “But in contexts where a huge mining project has more visible environmental implications, we should expect a natural reaction from society and environmental groups,” says Duhalt.
It is a clash of environmentalisms. Citizens who live in countries rich in natural resources do not want to see a deterioration in their ecosystems or in pollution derived from extractive activities, even if this activity could lead to a global energy transition that could benefit the environment.
“Here the social license to operate and dialogue with communities acquire strategic importance, because the transition has to be fair,” says Duhalt, a thought that is very much in line with the mining practices that multilateral organizations such as the Bank have been promoting. World Bank and the International Monetary Fund for at least two decades. Companies must, Duhalt points out, get closer to communities to understand what their needs, capabilities and values are. “You can’t establish your will simply because you earned a concession,” he says.
“We should not tolerate the fact that there are going to be regions of sacrifice and regions that enjoy the benefits of the energy transition,” believes Duhalt. “Everything indicates that the demand for copper will continue to increase and the question is where are we going to get it from and under what conditions? To what extent will they affect communities? “That is a very complex conversation that will gain traction in the coming years.”
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