Panama mine contract end will worsen economic woes

Significance

The decision followed weeks of protests over the terms of the newly revised contract. Cobre Panama, located in Colon province, is Central America’s largest open-pit copper mine and Panama’s largest single private foreign investment, contributing around 5% of the country’s GDP and most of its export revenue.

Impacts

• Panama could face a further hit to public finances if FQM wins an arbitration case.
• The mine closure could contribute to rising global copper prices.
• Higher borrowing costs will make it more difficult for future governments to meet demands for social spending, prolonging protest risks.