ALL THAT SHIMMERS
Mining has turned into one of the fastest growing segments of the Panamanian economy, and it is expected to grow even faster now that the government has identified mineral reserves estimated at $200 billion.
The mining industry's growth is set, with the following reserves already identified: 22 billion kg of, 12 million ounces of gold, 708,73808 kg of silver and 250 tons of molybdenum, which at current prices amounts to $200 billion. Of this total, 53% must stay in the country in the form of taxes on income and dividends
In 2013, the mining industry in Panama contributed $427.7 million to GDP. Last year, the industry grew by 31.4%. The mining industry has experienced constant growth since 2008, due to the fiscal benefits that the government has implemented to attract investors. Between 2008 and 2013, the mining industry has doubled its contribution to Panama's GDP, from 0.7% to 1.3%.
With the current investment that the government is promoting, the sector is expected to represent at least 10% of the national GDP by 2019. Currently 2.5% of GDP is a result of mining activities. Between January and October 2012, gold exports reached $98.7 million, marking a significant rise over the previous years. In 2010 gold exports were $57 million, $11.8 million in 2009, $5.8 in 2008, and just $2.9 in 2007.
The geological structure of Panama, along with its geographical position, has allowed experts to find mineral deposits in the subsoil, such as gold and copper. The activity of the sector, traditionally focused on the extraction of limestone and sand, has been expanded to copper and gold.
The sector is crucial not only for the growth of the national economy, but also for the generation of new and well paying jobs, especially in the rural areas close to the mining sites. At the same time, the development of new mining projects in Panama will enhance and improve the existing infrastructure connecting the new sites with the surrounding villages and secondary towns.
Cobre Panamá illustrates the potential of the mining industry in Panama. This mine is the largest open-pit silver-gold and copper development project in the country. The concession is located 120 km west of Panama City and 20 km from the Caribbean Sea coast, in the district of Donoso, Colón province, in the Republic of Panama.
The topography in the concession area is low (under 300 meters), rugged, and with considerable local relief covered by dense rainforest. Climatic conditions are tropical with high precipitation levels, high humidity and relatively high temperatures of 25°C to 30°C year-round.
The concession consists of four zones totalling 13,600 ha. In April 2013, First Quantum Minerals assumed an 80% equity interest in Minera Panamá, S.A. (“MPSA"), the Panamanian company that holds the Cobre Panama concession.
The company, Canada's biggest pure copper player, has mines in Zambia, Mauritania, Australia, Finland and Peru.
“Minera Panama mine will be operational in 2017, and will increase the country's exports by a wide margin. To put it into perspective, the exports of this one mine alone exceed the income of the Panama Canal (…) This project will make the mining sector the biggest exporter in the country. Minera Panama will create more than $2 billion per year in exports of copper, coal, and silver.
The expansion of the Panama Canal will produce 1.5 billion per year. This demonstrates mining's ability to impact the local economy" said Mr. Morales, President of Camara Minera de Panama. With an approximate investment of $5 billion (the same investment of the expansion project of the Canal), the mine will be fully operative starting in 2017, with a extracting validity of 40 years that will allow the site to produce 250,000 tons of copper on a yearly basis.
ALL THAT SHIMMERS
TABLE OF CONTENTS
Year In Review
What A Year
Impressive growth figures far ahead of the Latin American average are a testament to the government's business-friendly policies. The resolution of Canal expansion in 2015 should also provide a boost, with dollar appreciation the most dangerous shark in the water.
read articleInterview
HE Luis Ernesto Carles, Minister , Labor and Workforce Development
TBY talks to HE Luis Ernesto Carles, Minister of Labor and Workforce Development, on the current state of the Panamanian labor market, and the ministry's coordinated efforts with the private sector to train human capital.
read articleInterview
HE Alcibíades Vásquez Velásquez, Minister , Social Development
TBY talks to HE Alcibíades Vásquez Velásquez, Minister of Social Development, on the importance of developing high-risk groups in Panamanian society, and working with national and international organization to address illiteracy and unemployment.
read articleInterview
Carlos G. Fernandez, President, Chamber of Commerce, Industry, and Agriculture
TBY talks to Carlos G. Fernandez, President of the Chamber of Commerce, Industry, and Agriculture, on the Chamber's involvement in the nation's economy and politics over the decades, and the advantages the Panamanian market offers to international investors.
read articleInterview
Ricaurte “Catín” Vásquez, CEO, Central America and the Caribbean at General Electric (GE)
TBY talks to Ricaurte “Catín" Vásquez, CEO for Central America and the Caribbean at General Electric (GE), on emerging demand segments, modernizing the power grid, and the potential of LNG.
read articleFocus: LNG
Building Pressure
Today, LNG business is not a part of canal operations. The expansion of the canal, to be completed in April 2016, will open new routes for the transport of LNG through the waterway, offering interesting opportunities for the operators of the sector to enhance their business.
read articleInterview
Dr. Jorge A. Motta, National Secretary, Science, Technology and Innovation at SENACYT
TBY talks to Dr. Jorge A. Motta, National Secretary of Science, Technology and Innovation at SENACYT, on partnering with educational institutions, promoting innovation, and modernizing the private sector.
read articleInterview
Jose Ramón Icaza, General Manager, Mar Azul Project Management
TBY talks to Jose Ramón Icaza, General Manager for Mar Azul Project Management, on trends in the construction sector, the impediments to developing beach-front real estate projects, and consolidation and expansion.
read articleInterview
HE Jorge Arango Arias, Minister , Agricultural Development
TBY talks to HE Jorge Arango Arias, Minister of Agricultural Development, on the developmental strategy for the industry, the importance of utilizing new technology, and the plan to attract foreign investment in the sector.
read articleInterview
Vilma Moreno de Arias, Executive Director, Centro Medico Paitilla (CMP
TBY talks to Vilma Moreno de Arias, Executive Director of Centro Medico Paitilla (CMP) and Dr. Ramon Crespo Berges, Medical Director, on how the health sector is evolving, the importance of human capital, and future of the industry.
read articleInterview
Joaquin Villar-Garcia, Rector, Columbus University
TBY talks to Joaquin Villar-Garcia, President of the Directors' Council and Rector of Columbus University, on the evolution of education on Panama, important achievement of the university, and ensuring an internatioanl standard of instruction.
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