Panama Greenlights Cobre Panama's Exports, Setting Stage For Future Negotiations

Panama has shown interest in resolving the future of the shuttered Cobre Panama mine after President Jose Raul Mulino authorized the export of 120,000 tons of copper concentrate stockpiled at the site since its closure in December 2023.

"I authorized that they take out the material that is grounded there. It is being wasted, and Panama has invested a barbarity of money into it. The issue of the mine must be handled with great responsibility and taking into consideration national interests." Mulino said, according to Reuters.

He noted that First Quantum Minerals FQVLF, a Canadian miner that operates the site, has to reimburse Panama once the material is processed abroad.

Former President Laurentino Cortizo shut down Cobre Panama, a $10 billion operation, following widespread protests over environmental concerns and allegations that First Quantum received overly favorable tax terms.

The mine's closure dealt a significant blow to both the miner and the domestic economy as it accounted for 40% of the Canadian company's global revenue and 5% of the country's GDP.

According to the National Council of Private Companies, the ripple effect left an estimated 54,000 unemployed and disrupted numerous local businesses that relied on the mine.

First Quantum's stock plummeted as a result, and the company has since been embroiled in arbitration proceedings against Panama in an attempt to recover damages.

Mulino, who took power in July 2024, largely avoided discussing the matter directly during his first months in office. His administration initially focused on pushing through controversial social security reforms, leaving the issue of Cobre Panama unresolved.

However, the economic strain caused by the mine's closure has become increasingly evident. "It's dramatic, what is happening. We are feeling it, in unemployment, lack of revenue for the state and in many other things like paying providers that haven't been paid everything they are owed," he said.

The decision to allow the stockpiled copper concentrate exports is a small step, but those funds will help to cover the care-and-maintenance site, which accounted for as much as $115 million in H1 2024.

After retreating from the May 2024 highs, when the price exceeded $10,800 per ton, copper has re-entered the market focus as President Donald Trump's administration entertained the idea of tariffs on copper imports.

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