Panama opens door to Canadian First Quantum’s mine revival with copper export approval

Bloomberg describes in a recent article that after months of uncertainty, a glimmer of hope shines for Canadian First Quantum Minerals company's flagship mine in Panama. 

Canadian First Quantum Minerals Ltd. has received approval from the Panamanian government to begin exporting copper concentrate stored at its Cobre Panama mine, offering a glimpse of hope that the company may resume operations at the site after its shutdown in late 2023.

Panama’s President, Jose Raul Mulino, confirmed that the government has authorized the export of “ground material,” referring to copper concentrate stockpiled at the mine since its closure. Mulino also indicated that discussions regarding the mine’s future would begin next week, with the goal of finding a resolution “God willing.”

The Cobre Panama mine, one of the world’s largest copper projects, was closed in December 2023 following anti-mining protests. The operation, worth $10 billion, accounted for approximately 5 per cent of Panama’s economy and provided around 40 per cent of First Quantum’s revenue prior to the shutdown.

“What comes next — that’s exactly what we are going to start to deal with,” Mulino said, acknowledging the complex and sensitive nature of the mine’s future. “The issue of the mine must be handled with great responsibility and taking into consideration national interests and protecting and benefiting Panama.”

First Quantum's shares jumped by as much as 12.6 per cent following the announcement.

Mulino has spent recent weeks engaging with local businesses and workers who have been affected by the mine’s closure, which has led to the loss of around 54,000 jobs, according to estimates from the National Council of Private Companies.

“It’s dramatic, what is happening,” Mulino said. “We are feeling it, in unemployment, lack of revenue for the state and in many other things like paying providers that haven’t been paid everything they are owed.”

The government also granted approval for First Quantum to activate its 300-megawatt thermal power plant, a necessary step for resuming copper concentrate exports.

The Canadian company emphasized that the revenue generated from these exports will be used for conservation efforts at the mine site.

First Quantum also reaffirmed its commitment to working with Panama to find a solution that benefits the country, stating, “We reaffirm our willingness to engage in discussions and find the best solution together with the aim of contributing to the wellbeing of the country and all Panamanians.”

While the mine's reopening remains uncertain, Mulino’s remarks mark the first indication that a path forward may be emerging. However, negotiations are contingent on First Quantum dropping its arbitration proceedings against Panama. The mine remains controversial, with concerns over pollution and accusations that the company received an unfair tax deal.

Mulino summed up the impact, saying, “That 5% of GDP that we threw out the window in a single day — everyone thinks it’s a statistic. But we are feeling it.”

By Naila Huseynova