The decision of the Legislative Assembly to not endorse the bill that seeks to approve the contract between the government and Minera Panamá, shows the fragility of the contracts between the Panamanian state and companies.
The obstacles to the mining project date back several years, since the legal dispute began in 2009, when the Environmental Impact Center (CIAM) filed an appeal of unconstitutionality against the contract granting a 20-year concession to exploit and commercialize the gold, copper and other mineral resources of Cerro Petaquilla.
The mining company which is an investor in the Cerro Chorcha project, in Bocas del Toro, has demanded international arbitration against Panama for expropriating the concession in 2010.
Six years after the Panamanian government expropriated the concession belonging to Dominion Minerals Corporation, in Cerro Chorcha in Bocas del Toro, the American company has filed for arbitration, Laestrella.com.pa reported.
The concessionaire has filed a reconsideration motion to avoid cancellation of the concession, and while it is resolved, the government will take care of the necessary maintenance work.
The review process to be carried out now by the Ministry of Commerce and Industry (Mici) could take up to two months. Once the process has been completed, it will be decided whether or not to cancel the concession granted to the Canadian company Petaquilla Minerals..
Although the concessionaire Petaquilla Minerals says it is complying with the requirements of the government, the possibility of canceling the concession is being studied.
The 180 day period which the Ministry of Trade and Industry (Mici) awarded in January to the conessionarie Petaquilla Minerals to resolve its financial problems has come to an end, and the government could revoke the concession granted in 1997.
The Varela administration has announced that it will analyze revoking the concession granted to Petaquilla Minerals to operate at Molejón and freeze the paperwork for new mining concessions.
Despite the large mineral potential in Panama, the Minister of Commerce and Industry, Meliton Arrocha, announced that mining concessions have been frozen pending audits of permits issued in previous administrations.
Greenfield Resources has initiated efforts to request the reopening of the Remance mine, in which it plans to invest $110 million.
16 years since the closure of the mine, caused by the collapse of the gold price in the international market, the Panamanian company Greenfield Resources Inc. has asked the National Environmental Authority (ANAM) for approval of an environmental impact assessment (EIA) in order to reactivate their exploitation activities. The site in the province of Veraguas has projected a production life of 12 years and to exploit it the company plans to install a plant with initial capacity to process 5000 tons per day of the material, with projections to increase this to 7000 tonnes.
The government has announced that it will revise all contracts awarded and projects that are not being run will be reassigned.
State institutions responsible for granting operating licenses to mining, forestry, clean energy generation and hydrocarbon projects, have a deadline of two weeks to complete the collection of all permits, licenses and concessions granted in the past two governments and present a report to President Juan Orlando Hernandez, who will decide whether or not to revoke the licenses that have not been executed in order to reallocate the revoked contracts to new investors.
At the moment studies are being carried out on more than 160 applications from companies seeking to explore mining areas under the framework of the new legislation passed in 2013.
Since the adoption of the new Law on Mining operations in Honduras, the Honduran Institute of Geology has received more than 160 applications for exploration permits from mining companies.
The concessionaires of the India and San Albino Murra mines are carrying out the feasibility studies needed to obtain approval to begin operations.
The India mine, owned by the concessionaire Condor Gold, is the one which is closest to operations, assuming the feasibility studies give good results.
Carlos Zarruck, Director of Mines at the Ministry of Energy and Mines (MEM), said in an article on Laprensa.com.ni that "investment by the company in this area amounts to $150 million. "India Mine is the next industrial that could be the same size as El Limon mine or the Bonanza mine, in terms of exploitation," he added.
The approval of a draft contract-law in favor of Vera Gold Corp. would ensure an investment of more than $50 million in the former Santa Rosa mine.
This contract-law must first be approved by the Panamanian Congress. The lawyers explained that the aim of this type of concession by law is to protect the company.
"It shields the company against a change of government.
Four awards have been made so far in the Caribbean and in the Pacific, to Noble Energy, Infinity Energy and Industrias Oklahoma Nicaragua.
According to the Minister of Energy and Mines (MEM), Emilio Rappaccioli, "the company Noble Energy, which between 2013-2015 will invest between $180 million and $670 million is at the moment making progress in drilling the first well, but in Nicaraguan waters" reported Elnuevodiario.com.ni .
The government has awarded the company City Petén a contract for exploration and exploitation of oil in the Yalcanix area in the department of Petén.
Jose Paez, legal representative of City Peten, said they plan to start environmental impact studies and in the next three years will be investing $30 million during the exploration stage.
The approval came after a long period of legal analysis.
84 applications for exploiting iron oxide are awaiting the implementation of the Law on Development Promotion and Public Debt Restructuring.
One example of the country's potential is the company Five Star Mining, which according to the Central Bank of Honduras (BCH), between 2010-12 exported 2.4 million tons of iron oxide to China.
Laprensa.hn reports: "With respect to other exploited metals, iron oxide is one of the "non-metallics" that has experienced growth over the past three years, going from $8.4 to $60.7 million in exports".
The so called "Mortgage Law" in Honduras is causing alarm to mining companies who hold unproductive concessions.
According to an article in Elheraldo.hn in a meeting with representatives from the U.S. Embassy in Honduras, "The leadership of the National Association of Metal Mining Companies in Honduras (Anamimh) has formalized its position against the applicability of the Law on Development Promotion and Domestic Debt Restructuring, because it is a threat and an attack against the local mining industry and deserves to be vetoed by President Porfirio Lobo. "
Companies from several countries are waiting for regulations on the new Mining Act in order to exploit the nation's mineral potential.
According to the Minister of Geology and Mines, Aldo Santos, the regulations could be ready in late August. He explained that after that date the Honduran Institute of Geology and Mines will respond to all of the concession applications it receives.