Panama OKs First Quantum’s copper mine care plan

Panama has approved First Quantum Minerals’ (TSX: FM) maintenance plan for the shuttered Cobre Panama copper mine, clarifying that this does not signal a restart of operations.

Trade and Industry Minister Julio Moltó said the approved plan is aimed at preventing environmental damage and preserving equipment that has sat idle for nearly 20 months. He stressed in remarks to Prensa Latina that the site remains closed and that the initiative is strictly for environmental protection and site care.

The plan, which includes updated environmental and legal protocols, was deemed necessary following the abrupt government-ordered shutdown in late 2023 under the previous administration. Ten government agencies, including the Ministry of the Environment, will oversee implementation.

Moltó said First Quantum will fund and carry out the plan, though he did not disclose its cost or exact duration. Experts estimate the work could take three to six months, accounting for environmental safeguards and eventual copper export.

Shares in First Quantum Minerals fell 1.5% to $20.37 apiece on Friday afternoon in Toronto, valuing the company at $17 billion. 

Arbitration

First Quantum announced in March that it would pause arbitration proceedings in hopes of resuming negotiations with the Panamanian government on the mine’s future.

Cobre Panamá, a $10-billion project and Central America’s largest open-pit copper mine, accounted for about 5% of Panama’s GDP before the shutdown and generated roughly 40% of First Quantum’s annual revenue. Its closure has weighed heavily on both the company’s and the country’s economic outlooks.

President José Raúl Mulino has signalled interest in a new partnership model that reinforces national ownership of the mine, but he cautioned that a full closure could take up to 15 years due to its scale and economic significance. The mine directly and indirectly supported tens of thousands of jobs.

“Let’s be smart and get the most benefit as Panamanians from a mine we already have,” Mulino said earlier this month.

Before the forced halt of operations, Cobre Panamá produced more than 330,000 tonnes of copper and was on track to reach an annual throughput of 100 million tonnes by the end of 2024, placing it near the top of the world’s copper throughput ranking.