Franco-Nevada’s Panama arbitration set for 2026

Arbitration proceedings between royalty and streaming company Franco-Nevada (TSX, NYSE: FNV) and Panama over the reopening of the $10-billion (C$14.5-billion) Cobre Panama copper mine are moving forward after a tribunal formed in December said it will hear the case in October 2026.

Canada’s Franco-Nevada had a gold-copper steaming agreement with First Quantum (TSX: FM), the mine’s owner and operator. The mine’s closure in 2023 forced Franco-Nevada to take a $1-billion impairment charge.

“We are encouraged that President Mulino has indicated a willingness to discuss Cobre Panama this year and that sentiment in Panama now appears more supportive of restarting the mine,” CEO Paul Brink said on Monday, delivering the company’s 2024 full-year results.

Investor optimism pushed Franco-Nevada’s stock to a new 52-week high of C$212 per share in Toronto. By mid-afternoon, the stock was up 2.1%, bringing the company’s market capitalization to nearly C$41 billion.

President warming up

First Quantum has also filed a separate legal claim against Panama, seeking at least $20 billion in damages. The final hearing for that case was recently postponed until 2026, to leave room for negotiations with the country’s government.

President José Raúl Mulino has shown increasing openness to restarting the mine, which accounted for about 5% of Panama’s GDP before its closure. During a visit to the site in February, he acknowledged the mine’s economic importance and suggested he would explore “novel ideas” for its future. However, he has refused to negotiate with First Quantum unless the company drops its arbitration claim against Panama. 

Significant hurdles remain before the mine — which previously generated 40% of First Quantum’s revenue — can reopen. Mulino has prioritized passing controversial social security reforms, currently in their final stage in Congress, before fully addressing the Cobre Panama issue.

Additionally, lifting the open-pit mining moratorium imposed by the previous administration would require legislative support, which Mulino’s government may struggle to secure in the opposition-controlled National Assembly.