Panama commission urges orderly closure of First Quantum's Cobre mine

A Panamanian government commission has recommended President José Raúl Mulino order the final but orderly closure of First Quantum Minerals’ (TSX: FM) Cobre Panama mine, reversing expectations that officials were moving towards reviving one of the world’s largest copper operations.

The three-minister commission’s proposal calls for first evaluating a new arrangement with First Quantum that would permit Cobre Panama to resume operations while establishing its eventual closure. The recommendation comes after reviewing the mine’s audit, carried out by independent Swiss consultants, as well as its economic, environmental and legal implications. The commission said the document was not a final decision, which rests with the president.

Economy and Finance Minister Felipe Chapman backed an orderly closure while arguing that Panama should not bear its financial cost. The government has been weighing the economic damage caused by the shutdown against the legal and environmental issues surrounding the operation.

Commerce and Industries Minister Julio Moltó said the commission’s proposals were based on visits to communities surrounding the mine , rather than assessments conducted solely from government offices. Moltó said he and his team toured Donoso, Omar Torrijos Herrera and La Pintada, where they met mine workers, local authorities and suppliers before submitting their findings to the interministerial commission reviewing Cobre Panama’s future.

First Quantum did not immediately commented on the news but told MINING.COM it was preparing an statement on the commission’s proposal.

The recommendation represents a significant shift in the debate over the giant Cobre Panama mine, which produced as much as 1.5% of global copper before mining stopped in 2023 and accounted for 5% of Panama’s gross domestic product that year, according to First Quantum.

The commission’s deliberations follow months of study into the consequences of shutting one of Panama’s largest private investments. A government study published in September found the closure eliminated close to 36,000 jobs and reduced taxes and royalties flowing to the state by nearly $1.4 billion.

Environment Minister Juan Carlos Navarro argued the mine should never have been built and characterized the problem of closing it as one inherited from the administration.

Cobre Panama was First Quantum’s largest revenue generator before its shutdown, accounting for 40% of company revenue. Its closure followed nationwide protests over environmental concerns and the terms of the mining concession. Panama’s Supreme Court ruled the law approving the concession contract unconstitutional in November 2023 , and the government subsequently ordered copper extraction and processing to stop.

First Quantum has since resumed processing previously mined stockpiled ore with government authorization, an activity that does not amount to reopening the mine for new extraction. The company restarted one of three milling circuits during the second quarter and continues to forecast production of 30,000 to 40,000 tonnes of copper from stockpiles this year.

The stockpile program forms part of the government-approved preservation and safe-management plan. Panamanian authorities have said processing the material can reduce environmental risks associated with leaving mineralized ore exposed to rainfall.

President Mulino must now decide whether to accept the commission’s recommendation and proceed with a permanent closure plan, setting the course for a mine that was once central to both First Quantum’s finances and Panama’s economy.

This is a developing story. More to come…

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