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A law revoking a major mining contract with a Canadian mining company passed the first of two votes in Panama’s National Assembly Wednesday, a bill that would render a proposed referendum on the controversial contract unnecessary, Bloomberg reported.

A legislative committee this week had approved putting forward a referendum for lawmakers to consider, following weeks-long mass protests across the country over the deal that critics say threatens the environment, Bloomberg previously reported.

But a separate article revoking the contract passed its first hurdle with the 71-member legislature and faces its second vote Thursday.

Thousands of Panamanians had protested against a long-term copper mining concession granted to a subsidiary of the Canada-based firm, First Quantum Minerals Ltd.

The contract has significant economic implications for the Central American nation because Panama Mining, the local subsidiary, employs more than 9,000 people. In 2021, its operations accounted for 4.8 percent of Panama’s gross domestic product.

The new deal guarantees a minimum annual payment of $375 million to Panama, a tenfold increase over the previous agreement. It also extends Panama Mining’s concession over 32,000 acres for 20 years, with an option for an additional 20 years.

But the deal has stoked nationalist anger and environmental objections, with opponents warning that giving the company control over its water usage is unwise, especially during a period of drought that has impacted Panama Canal traffic.

In a bid to quell the demonstrations, President Laurentino Cortizo’s administration proposed the draft law to schedule a referendum for December, but the country’s electoral authority said it couldn’t be held before next May’s presidential election, the Associated Press added.

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