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Mining is not the word that usually comes to mind when one thinks of Panama. Most people associate white sandy beaches, world class fishing, untouched tropical rain forest, and profitable real estate investment with Panama. Nevertheless Panama is estimated to have as much of 100 million tons of copper giving it the world’s fifth largest reserves.

Panama

Panama is the land bridge that connects Central and South America. The site of the Panama Canal, Panama is tropical paradise with a first world infrastructure. In the last decade or many North Americans have taken advantage of Panama’s low cost of living and easy residency requirements to move here and purchase real estate. Investment in Panama is going into the commercial property boom, Panama’s enhancement of its infrastructure, and tourist related projects. It comes as a surprise to many to hear about mining a world class copper deposit in Central Panama.

Copper Mining in Panama

In 2005 the government of Panama granted a concession to Petaquilla Copper Ltd. and others for mining copper in Central Panama According to their web site this Vancouver based copper producer and its partners obtained a concession from the government of Panama for mining copper in Cocle Province. In a 795 square kilometer area the consortium of copper producers has Panama mining concessions totaling 136 square kilometers. This concession about 75 miles west of Panama City is believed to have a mining potential estimated at 9.4 billion recoverable pounds of copper as well as 1.37 ounces of gold, 24.1 million ounces of silver and 131.1 million pounds of molybdenum.

The overall government mining concession for copper and other minerals is for twenty years with two optional twenty year renewals. Recently Inmet Mining, a larger Canadian mining company, has bought out Petaquilla’s interest in this project.

When all of Panama’s available copper mining areas are included Panama possesses the world fifth largest copper reserves. Thus Panama sees jobs and prosperity associated with mining its copper. Panama also sees the dangers involved in strip mining copper with the displacement of indigenous peoples, deforestation, pollution, and disease.

In the fall of 2007 a group of ten environment organizations petitioned the Panama government regarding the above mentioned copper mining project. Complaints included contamination of surface and ground water and concerns that the polluting substances will soon include cyanide which is typically used to help extract gold from ore associated with copper deposits.

The Petaquilla mining area sits in the Meso-America Biological Corridor which is an unbroken string of forest reserves running from Mexico to Panama’s Darien Province.  The concern of the environment groups is that although Panama signed an international agreement regarding the corridor it has not passed legislation to implement the treaty’s obligations.

In presentation to the government the groups made the point that Panama makes investments in and promotes ecotourism and that copper mining contamination would not only damage the environment but drive away paying tourists.

With the world’s need for natural resources such as copper and the economic development of India and China driving up the prices of commodities such as copper it is unlikely that the copper mining in Panama will stop. It is also likely that environmental concerns will continue.

ABPanama deals in real estate, not mining; however, we keep abreast of issues that effect property values and investment in Panama. If you have concerns about Panama investment and real estate in areas where there is mining feel free to contact us.