Panama Approves Copper Concentrate Exports from Closed First Quantum Mine

Boosting Economic Prospects Amid Legal and Environmental Challenges / Reuters

Panama has authorized the export of copper concentrate from the shuttered Cobre Panama mine, operated by Canadian company First Quantum Minerals, marking a significant step toward addressing the economic fallout from its closure. This decision, announced by President Jose Raul Mulino, triggered a 15% surge in First Quantum’s stock prices on the Toronto Stock Exchange, reaching a two-month high and reflecting renewed investor confidence in the company’s prospects. The authorization focuses on approximately 120,000 metric tons of copper concentrate stockpiled at the mine since its shutdown in late 2023, a move Mulino justified by emphasizing the wastefulness of leaving valuable resources unused. To facilitate these exports, he also ordered the reactivation of a power plant essential for operating the Punta Rincon port, located 17 miles north of the mine, ensuring logistical support for shipping the stranded copper concentrate overseas. Panama’s trade and industry ministry later clarified that while it supports Mulino’s directive, any negotiations with First Quantum hinge on the company dropping its ongoing arbitration against the government, a condition that introduces uncertainty into the process. First Quantum welcomed the president’s statements, expressing satisfaction with the export authorization and the power plant restart, though it has not yet confirmed whether it will meet Panama’s demand to suspend legal proceedings.

The Cobre Panama mine, nestled in a biodiverse jungle region along Panama’s Atlantic coast, was a cornerstone of the nation’s economy before its closure, contributing roughly 5% to the country’s GDP and employing around 8,000 people directly, with thousands more jobs supported indirectly. Globally, it accounted for 1% of copper production, making it a key player in the international copper market. Its shutdown in November 2023 followed a Supreme Court ruling that deemed its operating contract unconstitutional, prompted by widespread protests over environmental concerns. Demonstrators, including environmentalists, indigenous communities, students, and labor groups, raised alarms about the mine’s impact on water supplies, biodiversity, and local ecosystems, accusing the government of favoring First Quantum with overly generous terms. The protests, which included road blockades that disrupted fuel and food supplies, underscored deep public discontent and ultimately led to the mine’s closure, leaving behind the significant stockpile of copper concentrate now at the center of this export decision.

Mulino’s announcement comes with a broader promise to review the mine’s future, with plans to begin this process as early as next week. He stressed that any decision would prioritize Panama’s national interest, signaling a potential willingness to explore options such as reopening the mine or renegotiating terms with First Quantum. However, the trade and industry ministry was quick to clarify that the current authorization does not indicate a resumption of mining activities, focusing solely on clearing the existing stockpile. Economically, exporting the copper concentrate could generate between $200 million and $300 million for First Quantum, based on current copper prices, offering a financial lifeline to the company amid the operational halt. For Panama, it presents an opportunity to recoup value from the stranded material, with Mulino insisting on reimbursement once the concentrate is processed abroad, a condition that highlights lingering tensions over revenue distribution from the mine’s operations.

Environmental considerations remain a critical undercurrent in this development. Since the shutdown, concerns have persisted about the safety of storing such a large volume of copper concentrate, with First Quantum previously warning that prolonged storage could lead to chemical reactions producing hazardous gases and rising temperatures, posing risks to health and safety. In December 2024, Mulino cited environmental assessments suggesting no immediate danger, yet the urgency to remove the stockpile aligns with addressing these potential hazards. The ministry also noted that reactivating the power plant could benefit Panama’s national power grid, adding a layer of public utility to the decision, though it emphasized that this does not equate to restarting mining operations. This nuanced stance reflects Panama’s effort to balance economic recovery with environmental responsibility, a tightrope walk that has defined the Cobre Panama saga.

The arbitration dispute between First Quantum and Panama adds significant complexity to the export authorization. Following the mine’s closure, First Quantum launched a legal claim, reportedly seeking up to $20 billion in compensation through the International Court of Arbitration in Miami, arguing that the shutdown violated its rights under a trade agreement. Panama’s government, in response, has made the suspension of this arbitration a prerequisite for any further engagement with the company, a demand that could delay or derail the export process if unmet. First Quantum’s silence on whether it will comply leaves the next steps uncertain, though its positive reaction to Mulino’s announcement suggests openness to dialogue. The outcome of this legal standoff will likely shape the feasibility of exporting the copper concentrate and any future prospects for the mine’s reactivation.

Social media platforms like X have buzzed with reactions to the news, offering a glimpse into public and investor sentiment. Posts from users such as

@PiQSuite

highlighted First Quantum’s satisfaction with the export authorization, while others, like

@Alpha_Bronze

, speculated that it could pave the way for negotiations to restart the mine, reflecting optimism in some quarters. These reactions underscore the high stakes involved, with the decision resonating beyond Panama’s borders to influence global copper markets and investor confidence in First Quantum. Meanwhile, local communities near the mine, some of whom have faced restricted access to their villages since the closure, may view the export move with skepticism, given the unresolved environmental and social grievances that fueled the original protests.

Looking ahead, Mulino’s planned review of the mine’s future could set the stage for a pivotal shift in Panama’s approach to Cobre Panama. Options on the table might include a revised operating agreement with stricter environmental safeguards, a permanent closure with a focus on site rehabilitation, or a hybrid solution allowing limited activity to clear the stockpile while addressing public concerns. The economic benefits of resuming operations are undeniable, given the mine’s contributions to GDP and employment, yet any move to reopen would likely reignite protests unless accompanied by transparent concessions to environmental and community demands. The copper concentrate export authorization, while a practical step, thus serves as a microcosm of the broader debate over balancing resource extraction with sustainability in Panama.

This development also carries implications for the global copper market, where demand continues to rise amid the transition to renewable energy technologies reliant on the metal. The successful export of Cobre Panama’s stockpile could ease short-term supply pressures, benefiting industries worldwide, while a resolution to the mine’s status could influence long-term copper availability. For First Quantum, the financial boost from the exports could strengthen its position as it navigates the arbitration and seeks to restore operations, though its next moves will depend on its willingness to compromise with Panama’s government. As Mulino prepares to tackle the mine’s future, the interplay of economic incentives, environmental priorities, and legal obligations will remain central to shaping the path forward, making this a story to watch closely in the coming weeks.