Panama Supreme Court rules Canadian firm's mining contract is unconstitutional

Panama's Supreme Court on Tuesday declared unconstitutional a 20-year concession for a Canadian copper mine that had sparked weeks of protests by environmentalists and others who argued it would damage a forested coastal area and threaten water supplies.

The announcement by the nine-justice court, after four days of deliberations, set off cheers among demonstrators waiting outside and waving Panamanian flags.

"This is what we had been waiting for," demonstrator Raisa Banfield said after what she called an agonizing wait. "The president has to suspend [mine] operations today."

Minera Panamais  the local subsidiary of TSX-listed and Vancouver-based First Quantum Minerals.

The dispute over the open-pit mine led to some of Panama's most widespread protests in recent years, including a blockade of the mine's power plant. Protesters also blocked parts of the Pan American highway, including a stretch near the border with Costa Rica. Just before the ruling was announced, they opened the roadway so that freight trucks could get through.

Minera Panama said in a statement earlier this month that small boats had blocked its port in Colon province, preventing supplies from reaching the mine. Naval police reported that a ship carrying coal decided to turn back due to "hostility from a group of protesters who from their boats threw rocks and blunt homemade objects" before being dispersed.

The protesters, a broad coalition of Panamanians, feared the mine's impact on nature and especially on the water supply. The mine employs thousands and accounts for three per cent of Panama's gross domestic product.

In March, Panama's legislature reached an agreement with First Quantum allowing Minera Panama to continue operating the huge copper mine in central Panama for at least 20 more years.

The mine was temporarily closed last year when talks between the government and First Quantum broke down over payments the government wanted.

The contract, given final approval Oct. 20, allowed the subsidiary to continue operating the mine in a biodiverse jungle on the Atlantic coast west of the capital for the next 20 years, with the possibility of extending for a further 20 years if the mine remains productive.

Since protests began, the government nearly passed legislation that would have revoked the contract, but it backtracked in a debate in the National Assembly on Nov. 2. Protesters' last hope was for Panama's courts to declare the contract unconstitutional.

In a statement following the release of the court's decision, First Quantum said it is committed making the project work for all sides.

"We want to affirm our unwavering commitment to regulatory compliance in all aspects of our operations within the country," the company said in a statement. "We will comment further as additional details on the ruling are made public."