REASONS OF GEOGRAPHY

Panama 2014 | ENERGY & MINING | INTERVIEW

TBY talks to Zorel Jaime Morales, Executive Director of the Panamanian Chamber of Mining (CAMIPA), on the new mines opening up in Panama, the issue of government regulation, and the need for community outreach programs.

Zorel Jaime Morales
BIOGRAPHY
Zorel Jamie Morales attended Universidad Nacional de Colombia to study Engineering, Mining, and Metallurgy in 1977, before attending the University of Auckland to acquire his PhD in Geothermal Energy Technology. He began his career at Carbones Del Caribe as a Coal Mine Operations Supervisor in 1984 before heading to IRHE Geological Research Section as an Engineer in 1986 until 1990. After this, he worked on numerous projects with different companies, including Minera Phelps Dodge and Cyprus Minera De Panama, before joining the Chamber of Mining (CAMIPA) in 1996 to take up his current position.

How has the evolution of the mining sector been in Panama, especially regarding foreign investment?

Foreign investment in the mining sector has grown considerably over the last four years. Firstly, we have the start of operations of Petaquilla Gold, a small- to medium-sized gold mine that became the main exporter of the country in only its second year of operations, with gold appearing as the main good being exported from Panama over 2011 and 2012. Right now, First Quantum Minerals is investing $6.4 billion building the Cobre Panama copper project, a world-class mining project that is expected to enter production in late 2017. For certain geological reasons, it has been found that Panama is a small place where world-class mine deposits have developed on its sub-surface, Cobre Panama and Cerro Colorado copper deposits being the ones to have evaluated known reserves. These two have been already discovered, but no systematic efforts have been conducted all around the country, leaving the majority of its territorial extension unexplored. The Cobre Panama Project is slated to produce around 300,000-350,000 tons of copper per year, which means that Panama will become around the ninth largest copper producer in the world. The value of metal exports will then represent around $2 billion per year, an income similar to that produced by the Panama Canal, for a country with a population of 3.5 million people.

How many jobs will Minera Panamá create with this project?

During the peak of construction, it will employ between 6,000 and 8,000 persons, and during operation it will employ about 2,500 people and create many more indirect jobs. When the Panama Canal widening project will approach its conclusion, most of those employed on its construction will become skilled candidates for work on the Cobre Panama mine. It will help the economy to keep growing at the pace it has shown over the past seven years. This means that mining will be an important part of the Panamanian economy over the next few years; however, in order to do that the best way possible, some deep changes will need to be performed regarding the national mining legal framework and institutional hierarchy. Today's laws and governmental institutions have severe technical, environmental, and social weakness, lacking the modern approach of responsible mining. It means the actual Mining Code does not include aspects such as mine closures, community involvement, environmental management, and several other aspects. It is a matter of urgency to start building all these capacities so the government can adequately rule the sector, given it will be as important as the producer of about 10% of country's GDP.

How is the mining sector perceived by Panamanians?

We have many NGOs spreading a lot of misinformation around the country, showing people the way mining was done 50 years ago or even facts that have no bearing on reality. However, after having an operating mine with another being constructed, people have started to realize that mining activity is not a synonymous with apocalyptic disasters, but an opportunity for the country to get not only economic benefits, but also important environmental and social opportunities that will not come any other way for many rural areas.

What other challenges will the mining sector face in the coming years?

A big participative effort is needed that includes government, the mining sector, and all stake holders, giving their best efforts to produce a modern legal framework and to build institutional capacities that will allow the economic, social, and environmental benefits to become a real fact to the communities involved and for the whole country.