(Bloomberg) — Panama’s ratification of a deal with a copper miner last month should have been a formality. Instead, it triggered nationwide protests that paralyzed the economy, destabilized the government and led to a nationwide ban on new mines.
The explosion of popular rage blindsided investors, forced authorities into a chaotic retreat and wiped out about $6.5 billion of value for shareholders of Canada’s First Quantum Minerals Ltd., a company regarded as a canny operator with decades of experience developing projects in Africa. A question mark now hangs over the future of its giant Cobre Panama mine.
Protests quickly became about more than just the mine. Panama was already seething with discontent over inflation, high unemployment and corruption, but there were also long-standing resentments over Cobre Panama’s environmental impact and its contribution to the economy.
With a looming election, the unrest coalesced around the mine, prompting the government of President Laurentino Cortizo into a sudden U-turn on the mine’s operating contract.
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