First Quantum faces $20M monthly bill in Panama

First Quantum Minerals (TSX: FM) will spend about $20 million a month to maintain its idled Cobre Panamá copper mine under a recently approved care and maintenance plan.

Roderick Gutiérrez, president of the Panamanian Mining Chamber, said the cost would be covered by selling copper concentrate stored at the site. The company currently has 121,000 tonnes of concentrate, though some has deteriorated after nearly two years of inactivity. Reprocessing the degraded material may not be economically feasible, Gutiérrez noted in an interview with local media.

The mine care plan includes updated environmental and legal protocols and is expected to take six to 12 months to implement, depending on equipment conditions. Oversight will involve 10 government agencies, including Panama’s Ministry of the Environment.

While discussions between the Panamanian government and First Quantum are ongoing, the reopening of Cobre Panamá faces significant legal, political and environmental hurdles. No specific timeline has been established, and the mine remains in a state of preservation and safe management.

2023 closure

Cobre Panamá, a $10-billion open-pit operation, was shuttered by presidential decree in late 2023. Last month the miner said the operation would have contributed $1.7 billion to the economy since then if it had remained open. 

Before its closure, the mine accounted for roughly 5% of Panama’s GDP and generated about 40% of First Quantum’s annual revenue. Its shutdown has severely impacted both the company and the national economy.

President José Raúl Mulino, who began his five-year term last July, has expressed interest in renegotiating the mine’s future under a model that prioritizes national ownership.  

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.