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Investment Agreement Between Inmet Mining Corporation and Kores/LS-Nikko Cobre Inc. Violates Panamanian Constitution

(Panama City) The Panamanian Environmental Advocacy Centre (CIAM) informs the public that the Investment Agreement between Canadian company Inmet Mining Corporation, owner of the subsidiary Minera Panamá, and South Korean companies Kores and LS-Nikko Cobre Inc., violates the second paragraph of the third article of the Panamanian constitution. This article of the constitution prohibits the partial cessation of territorial rights to foreign states, as is the case with mining concessions. [1] Kores is a South Korean state company, and both companies from this country will have a 20% interest in the Panama Copper project, which the company Minera Panamá is promoting in the District of Donoso, province of Colón.

The above-mentioned agreement follows the decision of the National Environmental Authority (ANAM) on December 28, 2011 to approve the Environmental Impact Agreement (EsIA) for the Copper Panama project, according to an announcement from Inmet. ANAM's approval came one day after Panama's Supreme Court of Justice made public its decision of July 18, 2011 in which it denied Minera Panamá an injunction against the creation of the Protected Area of Donoso, which is part of the Mesoamerican Biological Corridor along the Panamanian Atlantic. This is one of the most biodiverse parts of the planet, which Panama committed to protecting in 1997. Strangely, it took six months for the decision regarding the injunction to be made public, which highlights the current climate of uncertainty for investors in Panama.

CIAM considers that it is simply impossible for Minera Panamá to be capable of constructing such a large copper mine, planned to include thermoelectric plants, an incinerator, buried pipelines, tailings ponds, highways and even a port, while also ensuring the integrity of the protected area. In fact, according to the company's own study, the project will completely destroy 5,700 hectares of forest and affect 167 endemic species of animals, of which 83 are protected species.

As a result, it is impossible to comprehend how ANAM has approved the EsIA for this project when it has never had the technical capacity to evaluate it, as a result of which it needed to contract a Chilean company to do so on its behalf. This also demonstrates ANAM's lack of capacity to monitor this open pit mining project, which will cut down 5 hectares of primary forest each day during its construction, irreversibly affecting sources of water and terrestrial, river and marine ecosystems.

As a non-profit organization whose mission it is to “promote environmental protection through the strengthening of citizen participation, public policy advocacy related to the environment, and fulfillment of the existing regulatory regime,” CIAM will continue to promote initiatives that guarantee the integrity of the Protected Area of Donoso in the face of such a grave threat.

[1] Article 3, Paragraph 2 of the Panamanian Constitution reads: "The national territory shall never be ceded, transferred or disposed of, either temporarily or partially, to other States."

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