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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.

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Central America

Bukele urges Costa Rica to reform prison system amid rising crime rates

El Salvador’s President, Nayib Bukele, recommended that Costa Rica toughen its prison system, describing it as too “permissive” after visiting a Costa Rican prison with his counterpart, Rodrigo Chaves, on Tuesday at the end of an official visit.

“We believe the prison system should be less permissive, focusing more on the rights of those outside and a country’s right to security,” Bukele said after touring the La Reforma prison, located 23 km east of San José.

During Bukele’s visit to Costa Rica, the two presidents discussed different security approaches and strategies to combat organized crime. They also signed memorandums of understanding on tourism, trade, and bilateral relations.

Bukele noted the contrasts between Costa Rica’s prison system and that of El Salvador, which he reformed as part of his “war” against gangs launched in March 2022 under a state of emergency allowing arrests without warrants.

The Salvadoran president pointed out Costa Rica’s high cost per inmate, which he estimated at around $1,200 per month.

“They are spending nearly two minimum wages per inmate. It’s an injustice,” Bukele stated, adding that Costa Rica’s penal system “needs reform.”

Regarding inmate rights, Bukele suggested limiting intimate visits and TV access to prevent prisons from becoming “headquarters for crime.”

“We hope you take the necessary measures,” Bukele said about the increase in crime in Costa Rica, which has seen 757 homicides in 2024, mostly related to drug trafficking.

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Central America

El Salvador delivers aid to Costa Rica amid severe flooding and red alerts

Costa Rica raised alert levels on Tuesday due to ongoing heavy rains that are expected to continue throughout the week. So far, flooding has forced 1,369 people into shelters, and the country is receiving humanitarian aid from El Salvador in response to the emergency.

The National Emergency Commission (CNE) declared a red alert (the highest level) for the provinces of Guanacaste and Puntarenas along the Pacific coast, and an orange alert (high level) for the rest of the country, except for Limón province (Caribbean), which is under a yellow alert (intermediate level).

The CNE reported that the rainy pattern is expected to persist throughout the week. The National Meteorological Institute (IMN) is also monitoring tropical wave number 46, which has a high potential to develop into a tropical cyclone over the Caribbean Sea in the next seven days.

“Rainfall is expected to continue over the coming days, especially along Costa Rica’s Pacific coast. Additionally, there is a high saturation of soil across much of the country, creating significant vulnerability to incidents like flooding and landslides,” explained the CNE.

El Salvador’s President, Nayib Bukele, who is wrapping up a two-day visit to Costa Rica on Tuesday, announced on Monday the dispatch of a plane carrying humanitarian aid. Originally, the aid was intended for flood victims in Valencia, Spain, affected by a recent storm.

Bukele explained on Tuesday that Spain is currently not accepting international aid, so he decided to redirect the shipment to Costa Rica, splitting it across three smaller planes, with an additional 20 trucks carrying 400 tons of aid set to arrive in the coming days.

On Tuesday, planes carrying humanitarian aid arrived in Costa Rica, as confirmed by both governments.

“We have sent aid missions to Turkey, and we intended to send one to Spain, but the government there did not accept international assistance—not just from us, but from anyone. We were surprised at how swiftly the Costa Rican government acted,” Bukele stated on Tuesday.

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Central America

Nicaraguan Naval Force seizes cocaine on Pacific Coast, suspects escape

The Nicaraguan Army’s Naval Force reported on Tuesday the seizure of two bundles containing 80 packages of cocaine along the Pacific coast, although none of the four suspects were apprehended.

The illicit substance was seized near the Quizalá beach, in the municipality of San Rafael del Sur, Managua department. According to the military report, the four suspects “fled, leaving the drugs behind” after “detecting the presence of Army troops.”

The two “red bundles (…) contained 80 rectangular packages of cocaine,” the Nicaraguan Army stated.

The operation was conducted by the First Naval Troop Battalion “Commander Richard Lugo Kautz,” part of the Naval Force.

Authorities did not provide details on the individuals connected to the drug haul or the weight of the cocaine seized. They confirmed that the drugs were handed over to the relevant authorities for legal proceedings.

Nicaraguan authorities emphasize that they are implementing a strategy called the ‘Containment Wall,’ aimed at preventing the movement of drugs or drug-related money into populated areas. They maintain “close cooperation” with regional countries as well as the United States, Mexico, and Russia.

Nicaragua is located along a major drug trafficking corridor from South America to North America, where Mexican cartels operate, and the primary consumers are located.

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