Panama Eyes Cobre Panama Restart to Accelerate Economic Growth
Panama Targets 6% GDP Growth by 2027 if Cobre Panama Mine Reopens, Business Group Says
Panama’s economy expanded by 4% in 2025, but business leaders argue that reopening the Cobre Panama copper mine will be critical to lifting growth to as much as 6% by 2027.
The mine is operated by First Quantum Minerals and has been at the centre of economic and political debate since its suspension.
Growth Driven by Services, Manufacturing Lags
The Sindicato de Industriales de Panama (SIP), one of the country’s leading business groups, reported that 2025 growth was driven primarily by the services sector, including transportation and hospitality. Manufacturing, however, expanded by just 0.46%, highlighting structural imbalances in the economy.
SIP warned that without new growth engines, economic momentum could weaken in the coming years.
According to the group’s projections, Panama’s GDP could reach 6% growth in 2027 if Cobre Panama resumes operations and major investment projects linked to the Panama Canal Authority move forward.
In a downside scenario where the mine remains closed, growth would slow to 3.7% by 2027 nearly 40% lower than the upside projection.
Economic Impact of the Mine’s Closure
SIP stated that the shutdown of Cobre Panama weighed heavily on economic activity, employment and efforts to reduce labour informality. Labour market improvements recorded earlier in 2024 were partially reversed after mining operations ceased.
The loss of copper exports also reduced economic diversification, leaving Panama more reliant on traditional primary goods such as shrimp, fish and bananas. SIP noted that limited labour market data has complicated efforts to fully quantify the mine’s economic impact.
The business association described a potential restart as a cornerstone of Panama’s medium-term growth strategy, complementing canal-related investments, infrastructure development and foreign direct investment inflows. Resuming operations, it argued, would support job creation and strengthen domestic demand.
Presidential Decision Pending
President José Raúl Mulino said in January that the government expects to decide by June whether to authorise a restart of the mine. The pending decision has introduced uncertainty into both Panama’s economic outlook and the global copper market.
Cobre Panama is a large open-pit operation that accounts for nearly 2% of global copper supply. A restart would not only bolster Panama’s fiscal and export revenues but also ease supply pressures in an increasingly tight copper market.
The Panamanian government and First Quantum have agreed on a preliminary framework for negotiations after the company accepted state ownership of copper resources as a condition.
However, the precise implications of that principle for Cobre Panama’s operating structure remain under discussion.
First Quantum has indicated that, if authorised, it could process an existing ore stockpile at the site and produce approximately 70,000 tonnes of copper over a 12-month period.
The upcoming government decision is therefore poised to shape both Panama’s economic trajectory and broader copper market dynamics.
