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Panama as the canary in the coal mine: Upheavals in the global extraction industry and the need for a just, sustainable energy transition
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Panama as the canary in the coal mine: Upheavals in the global extraction industry and the need for a just, sustainable energy transition
Introduction
Beginning in October 2023, the Central American nation of Panama was convulsed by the largest demonstrations the country had witnessed since the final years of Manuel Noriega’s military dictatorship in the late 1980s. The target of these demonstrations was the Cobre Panama, Central America’s largest open pit copper mine operated by Minera Panama, a subsidiary of Canadian mining company First Quantum (Guevera, 2023).
On October 16, Panama’s president Laurentino Cortizo approved a 20-year extension of a contract with First Quantum to operate the mine. The business agreement was projected to generate $375 million a year in royalty payments for the Panamanian government over the course of the two decades (Moreno, 2023). The agreement immediately galvanized a series of protests that metastasized into a country-wide protest that resulted in massive road blockades, incidents of violence including 4 deaths and numerous injuries, as well as over $600 million USD in commercial losses (Nicomedes, 2023).
The scope and intensity of these demonstrations were unexpected, culminating in the establishment of a moratorium of new mining concessions by President Cortizo on November 3 (Leoncio & Berrío, 2023). After the Panamanian Supreme Court declared the contract unconstitutional, the Canadian company First Quantum announced that the mine would be shut down (Reuters, 2023).
This event will surely have cascading impacts on Panama’s economic future, the mining industry, and importantly, will greatly affect the dialogues and policies revolving around mining and its impacts on conflicts, environment, and health. Global discussions on climate change mitigation have rightly highlighted the necessity to reduce our dependence on fossil fuels through sustainable energy transitions (“The World Needs a Swift Transition to Sustainable Energy”, 2021). As will be elucidated later in this article, the transition to clean energy will entail a heavy reliance on the mining industry to supply the metals and minerals. This transition therefore produces a host of concomitant concerns regarding human rights, Indigenous land claims, national sovereignty, and environmental degradation.
To understand why a lucrative contract for copper mining in Panama generated such controversy requires a historical understanding of colonialism in Panama, the environmental impacts of this type of mining, and the local communities affected by mining operations.
Historical Context
The historical context of mining operations in Panama must be embedded in a firm understanding of the connection between colonialism and mining in Latin America. The voyages of figures such as Christopher Columbus in Latin American regions revealed lands replete with resources highly coveted by the crowns of European nations such as Spain and Portugal that were vying to establish their military and economic dominance. The lands were also home to numerous Indigenous societies, including formidable empires such as the Inca, Aztec and Maya. The subsequent massacres by Spanish conquistadors and the decimation of Indigenous communities from the ravages of new diseases brought over by the Europeans left deep, open scars that are still felt to this day.
The race to exploit the large lodes of gold and silver engendered a brutal system of forced labour which included both African slaves and Indigenous captives, many of whom had previous mining experience. In addition to the toll on human communities, the colonial mining operations also had profound environmental impacts including the deforestation of large swathes of territory and the release of toxic mercury vapours into the air surrounding the mines (Robin, 2011). Within this context of colonial mining, Panama, a land rich in gold deposits, was the first mainland territory to witness mining operations on its soil by Europeans (Redwood, 2021).
In the early 1800s, after centuries of Spanish rule, revolutionary fever spread across the Latin American continent. Between 1808 to 1826, nearly all of Latin America had liberated itself from the Spanish and Portuguese colonial rule (Day, 2015). Among these new nations, Panama attained its independence from Spain in 1821 as part of the Republic of Gran Colombia, finally establishing its own independence as the Republic of Panama in 1903.
The incursion of foreign economic powers into Panama and its resources, regrettably, would continue under a new guise. As an isthmus linking Central and South America and the Atlantic and Pacific Ocean, Panama was a location of great economic and geopolitical interest for many world powers. The United States acquired rights to construct and operate a canal to connect the Pacific and Atlantic Ocean in 1904 on a strip of land known as the Canal Zone. The canal was completed in 1914, and over the ensuing decades the American control and governance of the zone became a profound source of contention in Panama (Diaz, 2019).
Even after the control of the Panama Canal was ceded to Panama in 1977, the US government continued to use Panama as a preferred location for exercising geopolitical dominance during the Cold War. Manuel Noriega, Panama’s military dictator from 1983 to 1989, received support from US intelligence agencies and was viewed as a bulwark against Soviet influence in Central America (ABC News, 2017). Noriega himself was eventually deposed by an invasion of American troops in 1990. This history of foreign dominance in Panama helps elucidate the deep desire of many Panamanians to assert sovereignty, especially in regards to issues of natural resource extraction.
The Cobre Panama Mine Controversy
The protests which engulfed Panama’s streets in the autumn of 2023 were driven by concerns over the environmental impacts of continued mining at the Cobre Panama mine, its effect on Indigenous communities, and apprehension over issues of sovereignty over Panama’s resources (Silverstein, 2023). These concerns were aggravated by the nature of the mining in Cobre Panama, known as open pit mining.
Open pit mining has a considerably larger adverse impact on the environment than underground mining techniques. The various operations necessary to create the pit, such as drilling, blasting, and hauling, produce high quantities of air pollution, including radioactive dusts, as well as water and soil contamination (Monjezi et al., 2009; Wahab and Marikar, 2012). These environmental and health impacts of open pit mining formed the backdrop of much of the outrage expressed by protestors in Panama in the fall.
With Panama’s Supreme Court’s ruling that the 20-year contract made with First Quantum unconstitutional, there are a number of unresolved issues relating to the future of the thousands of Panamanians employed by the mine, the extent of the economic fallout, and the logistics of the mine closure (“Panama’s high court declared a mining contract unconstitutional. Here’s what’s happening next”. 2023). The Panamanian Government had envisioned mining taking a similar place of economic importance as its canal, and had hoped to increase the industry’s contribution to its GDP to up to 8% (Coalition Against the Mining Pandemic, 2022). Now with the closure of the Cobre Panama mine, this economic outlook has become more implausible.
This legal ruling in Panama is one of a number of important and seminal legal decisions that have taken place in Latin America in the last few years. These developments merit further mention as they illuminate the growing appreciation that the economic interests of mining corporations do not abrogate the rights of Indigenous and other communities over their land and their health.
In 2017, a unanimous vote by lawmakers in El Salvador led to the ban of all metals mining in the country, the first nation in the world to do so. This decision came on the heel of large protests led by civil society groups and academics in a country where a majority of its waters are polluted by toxins and heavy metals (Lakhani, 2017). More recently in December 2023, the Inter-American Court of Human Rights ruled that the authorization for a large nickel mine on Indigenous territory in Guatemala constituted a violation of Indigenous rights, and ordered a cease of all mining activities (Shailer, 2023). Other court decisions of similar magnitude have also taken place in Ecuador and Chile (“Chile top court ratifies closure of Canadian-owned Pascua Lama mining project, 2022; “Ecuador indigenous community rejects mining on their land after court ruling”, 2022).
Mining Through an Equitable and Just Lens
Some of the key lessons that mining companies operating on foreign soil will surely draw from the Cobre Panama case is the necessity to respect national and Indigenous sovereignty, in addition to developing robust systems for mitigating environmental damages. With regards to mining, the world faces a conundrum. The most effective climate mitigation strategies to abate fossil fuel consumption require the development and usage of technologies such as solar panels and electric vehicles which depend on metals and minerals for their function. The most recent UN climate conference, COP 28, ended with an agreement to phase out fossil fuels as many countries aim for Net-Zero emissions by 2050. This clean energy transition necessitates the use of at least 30 energy transition minerals, including lithium, cobalt, copper, and iron, all of which will experience a dramatic increase in demand in the coming decades (Owen et al., 2023).
The extractive operations that will be indispensable to meet this growing demand in metals and minerals could contribute to increased displacement of communities, water contamination, and degradation to ecosystems if the global clean energy transition is not effectuated in a just and sustainable manner (IEA, 2021). The mining industry’s past record has left much to be desired with regards to human rights and environmental protection. Alleged human rights violations associated with mining multinationals include the killing of activists in Guatemala, the funding of violent right-wing paramilitary groups in Colombia, and the forced displacement of communities in the Democratic Republic of Congo (Acosta 2023; Adebayo, 2023; Neve, 2014). Moreover, extractive operations can contribute to conditions that increase socio-economic impacts on host communities such as sexual violence, higher prevalence of HIV infection, and use of child labour (Dietler et al., 2022; Farley 2021; International Labour Organization, 2019; Sovacool, 2021).
As the demands for clean energy technologies grow, a just transition is necessary that minimizes environmental degradation and respects the sovereignty and human rights of communities who live on the land where the mining operations are implemented.
The closure of the Cobre Panama mine demonstrates the importance of hearing the voices of communities affected by mining operations, and provides a precedent for communities worldwide to assert their rights. It is widely recognized that the Global North has a responsibility toward mitigating climate change, as the brunt of its impacts will be principally borne by vulnerable populations of the Global South. A transition to clean energy affords global leaders the opportunity to enact mining policies which mitigate adverse environmental impacts, respect the rights of communities for informed consent to mining on their land, and ensure the equitable distribution of the wealth created through mining extraction.
Darren Wynes
Research and Partnerships Development Officer PEGASUS Institute
Rachel Wynes
Financial and Operations officer PEGASUS Institute
References:
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Acosta, L. (2023, May 31). Colombia accuses Drummond executives of funding paramilitary group. Reuters. Retrieved from ReutersAdebayo, T. (2023, September 12). Congo communities forcibly uprooted to make way for mines critical to EVs, Amnesty report says. Associated Press. Retrieved from AP News
Chile top court ratifies closure of Canadian-owned Pascua Lama mining project. (2022, July 14). Reuters. Retrieved from Reuters
Coalition Against the Mining Pandemic. (2022). NO REPRIEVE For life and territory: COVID-19 and resistance to the mining pandemic. Retrieved from MiningWatch Canada
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