Panama’s ratification of a deal with the Canadian miner allowing it to operate its flagship Cobre Panama copper mine for the next 20 years triggered violent protests that brought Panama’s capital city almost to a halt. It also scared away investors, forced authorities into a chaotic retreat, wiped out about $6.5 billion of value for shareholders of the company, and led to a nationwide ban on new mines.
The anti-mining demonstrations turned deadly on Tuesday when a man allegedly shot and killed two people, according to police. A video posted by bystanders on X, formerly known as Twitter, showed an elderly man apparently frustrated with a highway blockage by protesters, pulling out a pistol and opening fire.
Panama’s attorney general said the suspected gunman was arrested at the scene of the shooting and noted authorities are investigating 175 people for various crimes committed during the last two weeks of protests, 60 of which remain in custody while charges against them are being formulated.
Throughout the controversy, and as the market waits to see if the Supreme Court will kill the agreement, the Cobre Panama mine has continued to operate.
Portugal corruption allegations
Social unrest has also hit Portugal, where anti-mining groups are asking the government to halt and reassess all lithium projects. The upheaval follows allegations of corruption that led Prime Minister Antonio Costa to resign on Tuesday.
Costa handed in his notice just hours after prosecutors detained his chief of staff in a probe into alleged corruption in his administration’s handling of lithium mine concessions near Portugal’s northern border with Spain. The investigation is also looking into permits granted for a green hydrogen plant and data centre in the town of Sines, about 100km south of Lisbon.
Portuguese Environment agency APA earlier this year gave environmental approvals for local company Lusorecursos to extract battery-grade lithium and for Savannah Resources to develop four open-pit mines. Both projects are in northern Portugal.
Savannah, which has hired investment bank Barclays and financial consultancy Barrenjoey to find partners for its Barroso lithium project, said it was cooperating with the authorities. It noted, however, that neither the company nor anyone one of its staff is a target of the investigation.
Lusorecursos, which plans to start construction in the northern Montalegre in early 2025 and kick off lithium production in late 2027, did not reply to a request for comment.
The challenges faced by miners in Panama and Portugal, two relatively investor-friendly nations, provide a cautionary tale for foreign investors on the vulnerability of mining projects to public hostility and resource nationalism.
The developments come only five months after Chile announced a new public-private model for its lithium industry, which will see the state having a majority interest in all new contracts.
(With files from Bloomberg, Reuters)