PANAMA CITY--(BUSINESS WIRE)-- An independent analysis published today concludes that the Cobre Panamá copper mine in Donoso could generate a net loss of USD 23.11 billion for Panama. The comprehensive cost-benefit analysis evaluates the project’s revenues and costs, including the costs Panama would incur for closure and environmental remediation, as well as the human health impacts resulting from mining operations. In the event of a tailings dam failure, the project’s net losses could reach USD 95.27 billion. These findings raise critical questions as the government decides whether to allow mining operations to continue.
Conducted by Conservation Strategy Fund (CSF), an internationally recognized organization in the application of cost-benefit analysis to large-scale projects, the analysis evaluates the impacts of the Cobre Panamá copper mine over the period 2013–2074.
Although the project generates economic benefits from production, employment, tax revenues, and economic multiplier effects, the projected costs of the mine are substantially greater.
Costs that would fall exclusively on Panamanian citizens, totaling USD 86.84 billion, include:
Closure and post-closure costs, including tailings monitoring and management, acid and metal drainage treatment, and reforestation (USD 13.67 billion, or USD 54.84 billion in the case of a tailings dam failure);
Public health impacts, primarily associated with heavy metal poisoning (USD 55.25 billion);
Environmental costs, mainly from water contamination, erosion, and sedimentation (USD 17.92 billion, or USD 28.96 billion in the case of a tailings dam failure).
CSF states that the costs are conservative: even assuming high copper prices or higher royalties, the overall economic balance for Panama would remain negative.
Panama faces a decision with significant national implications: whether it is willing to accept a project with a negative net balance, in which costs substantially exceed the economic benefits generated for the country.
CSF conducted the economic analysis to provide rigorous, technical information to inform public debate.
About
Conservation Strategy Fund (CSF) is a nonprofit organization that uses economics to benefit people and nature. With nearly three decades of experience and internationally recognized leadership, CSF develops rigorous economic analyses to support public policy formulation, including extensive expertise in the economic valuation of the benefits and costs associated with large-scale projects.
