Panama allows First Quantum to export copper from disputed closed mine

Published: 2025-06-03 05:35:07 ET FM.TO

Published on 06/03/2025 at 05:35

Panama has approved a limited maintenance and environmental management plan for the shuttered Cobre Panamá copper mine, allowing operator First Quantum Minerals to export over 120,000 tonnes of copper concentrate currently stored at the site. The measure does not represent a reopening of the mine, but rather a controlled response to manage environmental risks and preserve critical infrastructure following its abrupt closure in late 2023.

The Cobre Panamá mine, one of Central America’s largest industrial projects, was ordered shut after Panama’s Supreme Court ruled that the mining contract granted to First Quantum’s subsidiary, Minera Panamá, was unconstitutional. The decision followed months of widespread protests across the country over environmental concerns, Indigenous land rights, and perceived unequal economic benefits from the operation. At the time, the mine accounted for approximately 5% of Panama’s GDP and 40% of First Quantum’s annual revenue.

Trade and Industry Minister Julio Moltó clarified on May 30 that the approval does not entail a resumption of mining activities. “The mine is not being reopened. We’re authorising the implementation of the care and safe management plan to ensure it is environmentally protected,” Moltó stated during a press conference. According to Reuters and Mining.com, the plan includes site monitoring, equipment preservation, and containment measures under the oversight of ten government agencies, including the Ministry of the Environment.

The export of the 121,000 metric tonnes of copper concentrate will fund these activities. The materials were mined before the closure and remain stored at the facility. First Quantum said this export will finance ongoing preservation efforts while it awaits a potential resolution on the site’s long-term future.

The maintenance phase is expected to last between three and six months. During this period, government-appointed experts will oversee the extraction, processing, and shipment of the stored copper, ensuring adherence to environmental protocols.

President José Raúl Mulino, who took office in 2024, has ruled out returning to the previous model of mining contracts. He has stated that any future mining activity must avoid legislative approval processes, which were at the centre of last year’s crisis. “There will be no mining contract law, period,” Mulino declared in April, according to Reuters. Instead, his administration is exploring a new framework that would maintain state ownership of mineral resources while potentially involving private operators under stricter terms.

While business groups have pressed for a swift reopening due to the mine’s significant economic impact, the government has emphasised caution. Mulino has stated that a full closure could take up to 15 years due to the scale of the operation and its economic implications. “Let’s be smart and get the most benefit as Panamanians from a mine we already have,” he said earlier this month.

First Quantum had initiated international arbitration after the shutdown but suspended those proceedings in March, indicating interest in further dialogue. According to AP, the company reaffirmed its willingness to cooperate with Panamanian authorities and participate in the current maintenance phase.

The open-pit mine, located in a biodiverse area near Panama’s Atlantic coast, produced over 330,000 tonnes of copper in its final year of operation and was projected to reach an annual throughput of 100 million tonnes by the end of 2024. Since its closure, around 1,300 workers have remained at the site, carrying out essential maintenance tasks with monthly costs reportedly exceeding $13mn.

In parallel, the government is conducting an environmental audit of the site to assess the condition of the mine and its surroundings. Finance Minister Felipe Chapman has also travelled to the United States to engage with legal claimants involved in arbitration proceedings related to the mine’s closure.