First Quantum Commits $20 Million Monthly to Maintain Cobre Panamá Copper Mine Amid Ongoing Closure

First Quantum Minerals Ltd., a Canadian mining giant, is spending between $15 million and $20 million every month to implement a Preservation and Safe Management (P&SM) program at its Cobre Panamá copper mine. This program aims to maintain environmental protection and structural integrity while the mine remains non-operational following a Supreme Court ruling in Panama.

Background: Legal Setback and Suspension of Operations

Cobre Panamá, one of the largest new copper mines globally, is located in Colón Province, Panama. It holds approximately 3 billion tonnes of proven and probable copper reserves and was a critical contributor to Panama’s economy, making up nearly 5% of GDP and employing over 7,000 people directly.

However, in November 2023, Panama’s Supreme Court ruled the mine’s 20-year concession agreement unconstitutional. This decision came after nationwide protests fueled by environmental, social, and legal concerns. The Panamanian government subsequently ordered the mine’s closure, which prompted First Quantum to initiate the P&SM program.

Preservation and Safe Management Measures

To safeguard the mine and its surroundings, First Quantum has retained a workforce of about 1,400 personnel on-site. Their primary tasks include maintaining water treatment systems, monitoring environmental indicators, and managing sediment ponds and waste structures.

The monthly expenditure for these activities ranges from $15 million to $20 million, though this may decrease if environmental requirements shift. The company emphasized that these actions are vital to prevent environmental degradation and preserve the mine’s physical assets during the shutdown.

Copper Concentrate Export to Fund Site Maintenance

To finance these ongoing efforts, the Panamanian government approved the export of more than 120,000 metric tons of copper concentrate stockpiled before the mine’s closure. This strategy allows First Quantum to generate funds for the P&SM plan without resuming mining activities. The company has also expressed willingness to share a portion of the concentrate sale proceeds with the government once the P&SM program gains full approval.

Long-Term Uncertainty and Economic Impact

The closure of Cobre Panamá has significantly impacted both the Panamanian economy and the global copper supply, as the mine represented about 1% of total global production. Although First Quantum has paused international arbitration to engage in talks with the Panamanian authorities, the potential for future legal proceedings remains.

The government estimates the full closure cost of the mine could reach $800 million. Discussions are ongoing to determine how this cost will be covered and to establish financial guarantees.