Panama has $200 billion in mineral reserves
Thursday, January 16 2014 @ 04:28 PM EST
Contributed by: Don Winner
"Panama has identified 50 billion pounds of copper, 12 million ounces of gold, 25,000 ounces of silver, and 250 tons of molybdenum. This adds up to $200 billion," said Zorel Morales, the Executive Chairman of the Mining Chamber of Panama.
Of this total, 53% will stay in the country through income taxes and dividends, said the senior executive of the organization.
Projects In Development
But despite Panama's important mineral reserves, mining is not well developed in the country.
There is only one operating gold mine - in Molejón in the province of Cocle, operated by Petaquilla Gold.
Right now a new mining project is being built to extract copper, gold, silver, and molybdenum, by Minera Panama, in Donoso, province of Colon.
It is estimated the new mine will begin operations within two and a half years. It's a big project.
There is another mine being built at Cerro Quema in Los Santos of medium size, which could be in operation within a year and a half.
In addition, a company is doing feasibility studies to look into the possibility of reopening the Santa Rosa mine, located in the province of Veraguas.
Mining activity produces 2.1% of Gross Domestic Product (GDP). However, all projections indicate that in two or three years mining will take on a greater participation in the economic structure of Panama.
The trend indicates that in 2013 the mining and quarrying activity produced about $ 550 million, as measured by real gross domestic product.
Last year $5.1 billion was invested in Panama for the development of mining.
Minera Panama invested $5 billion while the Santa Rosa and Cerro Quema projects invested $100 million.
For 2014 wide variations are expected, "we do not expect there to be a significant increase in exports because the sector's flagship project, Minera Panama, is still being built," Morales said.
But not everything that glitters is not gold. Last year the business did not go through its best moments.
Gold exports fell by 35% influenced by the fall in prices of this metal.
But despite this setback, mining activity is destined to be the most important economic activity in the country, given the large reserves of minerals in the country.
However, it must overcome opposition from environmental groups, among others. (Estrella)
Editor's Comment: Minera Panama is going to invest more - and spend more money - to build their mine than it will cost to build the expansion of the Panama Canal. Eventually when all of these new mining projects are up and running they will be bringing in new revenue worth almost as much as the Panama Canal. So yeah, right now all of the money is coming in thanks to Foreign Direct Investment as these companies plow investor dollars into building infrastructure. But the real big numbers come once the mine is operating. All of the money spend on operations and maintenance will remain in Panama. The government of Panama receives a percentage of every dollar earned in the form of either taxes or commissions.
And of course, it's mining, so there will be constant opposition from environmentalists. I believe there are ways to responsibly mitigate the potential environmental damages, and to extract the minerals in a manner that does not necessarily have to produce toxic sludge for generations. However, no one ever called an open pit copper mine in the jungle "pretty."