Panama is a high middle-income country (World Bank 2018) that has experienced unprecedented growth of 8-10% for 15 years. However, Panama’s growth has slowed considerably in recent years and has not been evenly distributed. Today, Panama is struggling to diversify its economy and to recover from the collapse of many small and medium-sized enterprises, rising unemployment and reduced government revenues following the COVID-19 pandemic. Panama ranks 67th out of 189 countries in the UNDP Human Development Index (HDI), but its HDI ranking drops to 89th when income inequality is taken into account and even lower to 108th when gender inequality is taken into account.
Panama’s mining sector began to grow rapidly shortly after the opening of the TSX-registered First Quantum/Cobre Panama mine (a C$7.5 billion investment), which began operating in 2019 and subsequently became the most modern and largest mine in Central America and the largest foreign investment in Panama’s history. Today, mining revenues are second only to those of the Panama Canal. In 2020, out of US$1.3 billion in exports, US$813 million was attributed to mining. With two more mines coming on stream in the coming years, the economic contributions of mining and Canada’s role as a major investor in the sector will remain substantial for years to come.
As Panama attempts to modernize its mining governance framework and practices, there is a historic window of opportunity to achieve a more responsible and inclusive mining sector, with broader opportunities to generate sustainable revenues. Panama’s Ministry of Commerce and Industry (MICI) has made the modernisation of the mining sector one of the country’s top economic priorities. Through the efforts of the Canadian Embassy in Panama, in 2020 the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) conducted a comprehensive assessment of the country’s capacity to implement the Panamanian Mining Policy Framework (MPM). The IGF made recommendations in four key areas: i) socio-economic benefits; ii) environmental management; iii) legal and policy framework; and iv) optimisation of fiscal benefits. These recommendations have been incorporated into the MICI’s strategic planning and form the basis of their request for technical assistance (TA). Currently, Panama lacks the expertise and experience to effectively implement the IGF’s recommendations to modernise its burgeoning mining sector. Of the 44 professionals in the MICI’s National Directorate of Mines (DNRM), only 17 have any mining expertise, 35.3% of whom are women. Only three Panamanian universities offer formal training related to mining (specifically: geotechnical engineering, geology) and the programmes are relatively recent (2012 to present).
The objective of this initiative is to strengthen individual human resources and the institutional capacity of the MICI’s National Mining Directorate (DNRM) to effectively implement the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF)’s 2020 recommendations, to achieve a more inclusive, gender sensitive, safe, and sustainable mining sector in Panama. The TAI will offer advice on gender-sensitive and environmentally sustainable mining policies, tools and practices as well as proactively train and engage Panama’s next generation of mining policymakers and engineers.