McGill Research Group Investigating
Canadian Mining in Latin America


Key Data

Company:Petaquilla Gold (Subsidiary of Vancouver-based Petaquilla Minerals) Operational status:production Materials extracted:gold Type of mine:open pit Main issues:indigenous rights, land rights, human rights, public health, biodiversity


Petaquilla Gold’s Molejon mine, located within the MesoAmerican biological corridor, is the only industrial-scale mine currently operating in Panama. This open-pit mine started operations in 2009 and achieved commercial production in January 2010. Petaquilla has come under fire for its poor environmental and social track records.

It has been widely criticized by members of surrounding communities for its failure to consult, water contamination, property destruction without compensation, and unfulfilled development projects. Community organizations have coordinated several blockades and protests over the last years. Environmental contamination and weak environmental regulation have been associated with the Molejon gold mine since its inception. In 2008, the National Environment Authority (ANAM) fined Petaquilla nearly $2 million for starting operations without an EIA, and for failing to comply with environmental regulations. ANAM found that environmental quality was severely degraded in the 169 ha mine site: 50 ha of trees had been clear-cut, with subsequent soil erosion, water contamination, and biodiversity loss. It is estimated that 100ha of rainforest have been destroyed by the Molejon project, undermining the integrity of the MesoAmerican Biological Cooridor (MBC). In 2008, the International Union for the Conservation of Nature called for a moratorium on open-pit mining projects in the MBC; this appeal has gone unheeded by the current Panamanian government.

The risk of impoundment failure is high in the Donoso region, which lies in the Atlantic zone that can receives anywhere between 4500 and 8000 mm of rain per year. In 2010, the area experienced higher-than-average rainfall, and three communities reported sudden and massive fish and animal kills in local rivers, suggesting that the walls holding mine tailings and cyanide solutions had been breached or over-topped.  Although Petaquilla denied the spill, the ANAM investigated the incident and found that tailings impoundment walls were eroding and that there was evidence of sedimentation from the mine in the Molejon river (ANAM 2010). The ANAM also determined that the tailings vats contained levels of cyanide, mercury and other heavy metals above acceptable operating limits.

Local campesino and Indigenous Ngobe residents attribute a number of problems to the operation of the Petaquilla mine. Water contamination is a central concern: residents report an increase skin rash & lesions from consuming or coming into contact with contaminated river water, and livestock deaths from animals drinking from the river. They also state that the mine has been responsible for destruction of personal property, forced eviction, an increase in local alcohol/drug consumption. Of especial concern are the growing social rifts created between community members who support and oppose the mine. over whether the mine is beneficial or damaging. Several roadblocks and marches have occurred throughout the past decade, some lasting for up to two weeks. The majority of these protests have been in opposition of the mine and there have been instances of violent repression by police.  Pro-mining rallies have also taken place in the town of Penomone, some 40 kilometers away in 2011 and again in 2012.