Mining, a very generous industry in economic terms

Minister of Trade and Industry, Roberto Henríquez

Due to its size and large production volume, metal mining in Panama is export oriented, said Minister of Trade and Industry (MICI), Roberto Henríquez, who noted that “we are convinced that with proper regulation this will be a highly generous industry in economic terms and will benefit surrounding communities”.

Minister Henriquez’ statements were expressed in the document “Mining in Panama and the World”, published by the MICI and the Mining Chamber of Panama (CAMIPA), which also includes that non-metallic mining sectors and the booming national construction market which has helped develop the great infrastructure that the country has.

He said that the existence of a Mining Code since 1963 reveals the intention to regulate this activity that has driven a major boom in the country “and that we must use the very best tools we have, because mining has created a controversy surrounding environmental and human rights issues.

However, information provided by the European Environmental Agency shows that the industries or human activities that impact the environment the most are heavy industry with 41%; the industrial waste and treatment sector with 15%, the oil and chemical industry with 15%, agriculture, produced by the farmers deforestation by burning and the effects that are caused to the earth by agrochemicals and pesticides, with 19% and then mining with 10%.

Henríquez said that the mining policy established and developed by the MICI covers four key areas, the first of which is the technological aspect because the use of cutting edge technology allows for clean production in which the waste cycle is closed and this (the waste) is turned into non contaminating raw material achieving a minimum environmental impact. “This is a requirement that the government sets for all projects that wish to operate in Panama”. He said.

The second area is social impact, as each mining project established in the country should have a policy for the development of the surrounding communities, so these can benefit with jobs and improvement to their quality of life.

“For over 50 years, we have seen places in this country where there has not been the slightest improvement in the living conditions of their inhabitants. They are usually places in which subsistence agriculture is practiced, placing our inhabitants at the lowest income position of the country”, said the minister.

The third key point is to achieve higher incomes for the country. The proposed legal changes to reform the Mining Code, which have already presented to the National Assembly (Parliament), will establish an increase from Mining companies of from 2 to 4% of gross sales from gold and copper products as it will be established in the law and address this issue”.

Henríquez also mentioned that the law will demand that mining companies pay taxes on mining income, once they begin to receive profit from the commercialization of products extracted from Panamanian soil.

The fourth key point is to protect the environment, the government policy is to ensure compliance with National and International regulations regarding ecological system protection; compliance with environmental impact studies and with the standards of best practices common to these and that the project be socially, culturally and environmentally committed to those communities that have opened their doors to it.

“Our goal is that in complying with these 4 fundamental pillars of our mining policy we can develop a transparent and clean industry, which favors those most in need” said Henríquez.

There are large mining projects in Panamá that are aware of the concerns for the environment and implement mitigation measures to reduce environmental damage, among which is Petaquilla Gold, which under the leadership of Richard Fifer-Carles, is promoting programs to recover from the possible impacts, such as reforestation, in addition to providing support to the communities next to where the minerals are extracted.

The company invests 2.3% in voluntary social programs and 17.1% in purchasing local services. At the end 45.4% of total gross production is invested between taxes and purchases, while overseas purchases represent a 5%.

Thus, Petaquilla Gold invests 45% of their gross production in the country, benefits that by far exceed the 2% in taxes that by law the company pays to the Panamanian State.