Central America

Central America’s biggest mine faces closure over tax spat

Photo: Luis Acosta / AFP

| By AFP | Francisco Jara |

Rising up through the lush vegetation of Panama’s Caribbean coast, a 125-meter chimney serves as a beacon for helicopters approaching the largest mine in Central America, which faces closure next week over a contract dispute.

Gigantic 400-tonne trucks slowly wind around the stepped slopes of a massive gash in the earth one kilometer wide, the ochre and grey of the copper mine standing in stark contrast to the verdant jungle surrounding it.

The activity could grind to an expensive halt in a matter of days.

Canadian mining giant First Quantum Minerals has until next Wednesday to sign a new contract with the government, which is demanding the company multiply the taxes it pays by 10.

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If the parties do not agree, the disagreement could halt the work of a mining project considered the largest private investment in Panama’s history, contributing four percent of the country’s GDP and 75 percent of export revenues.

“We have been given a deadline to sign the new contract by December 14, to accept the new terms,” First Quantum’s manager in Panama, Keith Green, who is Scottish, told AFP.

“We intend to reach an agreement, but negotiations are a bit deadlocked,” he added.

First Quantum, one of the largest copper miners in the world, began commercial copper production at the site in Donoso in 2019, through its subsidiary Minera Panama.

It has spent $10 billion on earthworks, construction buildings to house more than 7,000 employees, the purchase of heavy machinery, a power plant, a port for deep-draft merchant ships, access roads, and re-forestation plans.

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‘Fair income’

President Laurentino Cortizo in January announced plans to toughen the conditions of the mining license, with a new contract that would oblige the mining company to pay “at least” $375 million to Panama annually — ten times what it is currently paying.

“Panama has the inalienable right to receive fair income from the extraction of its mineral resources, because the copper is Panamanian,” he said.

This mine is “the biggest in Central America,” producing 300,000 tons of copper concentrate per year, said Green.

The deposit, discovered in 1968, lies on the Caribbean coast, 240 kilometers by road from the capital Panama City.

The company, listed on the Toronto Stock Exchange, built the Punta Rincon International Port next to the mine to transport the copper by ship, due to a lack of roads connecting the Colon port, 40 kilometers (25 miles) away.

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Despite the uncertainty over the mine’s future, activity has not slowed and the company has continued to invest in the site.

A new 200-tonne drilling rig — as tall as a three-story building — was inaugurated in a ceremony on Tuesday, causing heavy air traffic.

Helicopter pilot Oldemar Arauz explains that most officials visiting the mine prefer the one-hour air trip to the four-hour drive on a narrow road from the capital.

The drilling rig, made in the United States by the Swedish company Epiroc, cost $6 million, and was transported to the mine in 10 trucks.

“Latin America has 200 of these drills, 50 in Chile and now three in Panama,” said Epiroc’s Latin America manager Hans Traub.

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The drill was assembled by Chilean engineer Alex Gonzalez, who previously worked in Chuquicamata, the world’s largest open pit copper mine, situated in the Atacama desert, which has been operating since 1915.

Central America does not have the same mining tradition seen further south. Mining is illegal in Costa Rica and El Salvador, and while there is much potential for growth in Panama, the industry’s future is now hanging in the balance.

Related Topics:Central America Mine Panamá

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The Panama Public Prosecutor’s Office stated on social media that, through its Colón Drug Prosecutor’s Office and in coordination with the National Anti-Drug Directorate, authorities carried out the operation. The illicit substance was discovered inside a container scheduled for export.

Last Friday, officials also seized 1,506 packages of drugs in another container destined for Lithuania.

While authorities have not specified the type or exact weight of the seized substance, drug packages in Panama typically weigh around one kilogram each, and cocaine remains the most commonly confiscated narcotic in the country.

So far this year, Panamanian authorities have reported multiple drug seizures. Among them was a shipment of 5,356 packages intercepted on January 17, when agents of the National Aeronaval Service (SENAN) stopped a vessel near the Pearl Islands archipelago in the Pacific.

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According to official figures, in 2025 Panama seized 129 tons of drugs and 47.8 tons of chemical precursors, highlighting ongoing efforts to combat international drug trafficking.

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Guatemala narrows emergency measures to hardest-hit gang violence areas

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The measure comes two months after coordinated attacks attributed to the Barrio 18 left 11 police officers dead.

President Bernardo Arévalo initially imposed a state of siege in mid-January following the violence, which was reportedly in retaliation for government intervention in three prisons where gang leaders had staged uprisings.

That measure, which allowed arrests without a warrant, expired after one month. It was then replaced by a less restrictive “state of prevention,” alongside an increased security deployment in Guatemala City and surrounding areas.

According to Villeda, the state of prevention has been extended for two additional weeks but will now apply primarily to the central department of Guatemala — home to the capital — and Escuintla, which have recorded the highest levels of homicides and criminal activity.

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“We need to continue these joint operations between the police and the military to maintain control,” the minister said.

The measure will also remain in effect in border departments including Petén, San Marcos and Huehuetenango, which border Mexico, as well as Izabal, which borders Honduras and Belize, in an effort to prevent the entry of criminal groups linked to drug trafficking.

Villeda added that in the past two weeks, homicides have dropped by 25% and extortion cases by 33% compared to the same period in 2025.

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Costa Rica closes embassy in Cuba, citing human rights concerns

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Foreign Minister Arnoldo André confirmed that Costa Rica has also requested the withdrawal of Cuban diplomatic personnel from San José, leaving only consular representation in place.

According to André, the decision is driven by concerns over the worsening human rights situation on the island, including increased repression against citizens and opposition figures.

He also noted that Cuba’s ongoing economic and social crisis—marked by shortages of food, medicine, and basic services—has made the operation of the embassy increasingly difficult.

President Rodrigo Chaves backed the measure, stating that his administration does not recognize the legitimacy of Cuba’s political system.

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In response, the Cuban government rejected the decision, calling it a “unilateral” move taken under pressure from United States.

“Under pressure from the United States, Costa Rica has limited its relations with Cuba to consular matters,” Cuba’s Foreign Ministry said, describing the action as “arbitrary.”

Despite the diplomatic setback, Cuban authorities stated that historical ties between the two nations would endure.