Panama has officially approved the processing of stockpiled ore at First Quantum’s (TSX: FM) shuttered Cobre Panama copper mine, a significant step toward managing the idled operation. Commerce and Industries Minister Julio Moltó confirmed the resolution, expected by April 16, allows the company to extract and export roughly 38 million tonnes of material already mined and stored on site.
This decision marks a pivotal moment for the mine, which has been closed since 2023 following a Supreme Court ruling deeming its government concession unconstitutional. The move aligns with Panama’s broader care and maintenance plan launched last year, aimed at mitigating environmental risks such as acid rock drainage tied to long-term storage.
The stockpiled ore is projected to yield about 70,000 tonnes of copper, with processing set to begin approximately three months after approval and expected to run for a year. Proceeds from concentrate sales could offset preservation costs in 2026, depending on regulatory timing. The operation is also anticipated to create around 700 direct jobs, adding to the current workforce of 1,600, alongside indirect employment in logistics and services.
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Under President José Raúl Mulino’s administration, Panama has already sold over 122,000 tonnes of copper concentrate, generating nearly $30 million in royalties for public infrastructure projects. A 150-megawatt power unit has been restarted to support site maintenance and supply the national grid.
An ongoing audit of the mine, 85% complete as of mid-March, has identified environmental risks and recommended processing stockpiled material as a mitigation measure. BMO analyst Matt Murphy noted that this step represents a key de-risking move ahead of broader discussions on the mine’s future.
“We are ready to take the next step,” Moltó said, signaling the government’s intent to expedite the process.
The Cobre Panama mine, once responsible for about 1% of global copper supply and 5% of Panama’s GDP, has weighed heavily on both the national economy and First Quantum’s outlook since its closure. Before the shutdown, it produced 350,000 tonnes of copper in 2022.
Across its other operations, First Quantum projects copper production of 375,000 to 435,000 tonnes in 2026, with slight downgrades from prior estimates. Meanwhile, a decision on the mine’s long-term reopening remains pending, with Mulino expected to announce his verdict by June.
Panama faces a delicate balancing act, navigating economic pressures and environmental concerns. Support from Chilean President-elect José Antonio Kast, representing the world’s largest copper producer, could lend credibility to the process.
The government’s latest approval is a concrete move to extract value from the suspended operation, with potential proceeds from the 70,000 tonnes of copper expected to play a critical role in offsetting costs this year.
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