President Laurentino Cortizo said on Sunday Panama would hold a referendum to decide whether to scrap a contract with Canadian miner First Quantum's local unit following days of protests by thousands of people opposed to the open pit copper mine project.
The vote will take place Dec. 17 and its result would be binding, Cortizo said in a video message.
"I've respectfully listened to those who oppose the contract with Minera Panama," Cortizo said, using the name of First Quantum's local unit.
Neither First Quantum nor Minera Panama immediately responded to requests for comment.
Panama's government and the miner had agreed on a contract which would guarantee the Central American nation an annual income of $375 million while allowing First Quantum's local unit to operate the Cobre Panama project, an open-pit copper mine, for at least 20 years.
Protesters have criticized both the deal and the mine's environmental costs, even after Cortizo on Friday issued a decree rejecting all new mining projects.
Critics countered that the move would not affect the approved First Quantum contract.
On Saturday, Minera Panama voiced concern after protesters on boats approached the international Punta Rincon port where it operates.
"We are deeply concerned by this incident, which represents a significant threat for our operations and the safety of our workers," it said in a statement on Saturday, calling the actions "illegal and violent."
In a statement late Sunday, Cortizo's office noted that the contract was first established in 1991.
After Cortizo's announcement, Panama's main workers' union said its members will keep protesting in the streets until the contract is annulled.
"There's no maneuver in this fight that will deceive the people," a union representative said.
The Cobre Panama mine's activity accounts for nearly 5% of the country's economy, and last year represented about half of First Quantum's EBITDA.
