FQM Ramps Up Efforts to Reopen $10 Billion Cobre Panama Mine

First Quantum Minerals and its workers and suppliers in Panama are intensifying efforts to restart operations at the $10 billion Cobre Panama copper mine, more than a year after its closure.

The company has shifted from a low-profile approach to a more visible public relations campaign, including mass mine visits and public outreach events, according to Maru Galvez, Public Relations Manager for Cobre Panama.

The strategy appears to be working, with a recent community survey showing 96% support for the government renegotiating the mine contract.

Despite these efforts, First Quantum executives have yet to meet with President José Raúl Mulino, whose current priority is social security reform. Before its December 2023 closure, the mine contributed 5% of Panama’s GDP and 1.5% of global copper production.

“To obtain an operational license, we first need a social license,” Galvez said.

First Quantum’s share price remains significantly below its 2023 peak as investors await news on the mine, which accounted for 40% of the company’s revenue. The closure has already resulted in thousands of job losses, with more layoffs looming.

Panama is also feeling the impact, with slowing economic growth and worsening public finances. Another credit rating downgrade could strip the country of its investment-grade status, forcing some funds to offload Panamanian debt.

First Quantum’s troubles began when it sought a 40-year contract extension with the previous administration, which included a minimum annual payment of $375 million.

The agreement, ratified in October 2023, sparked massive protests that paralyzed the economy. Shortly after, the Supreme Court declared the contract unconstitutional, leading then-President Laurentino Cortizo to initiate the mine’s closure.

Since then, First Quantum has pursued a multipronged strategy to revive operations, including:

• International arbitration through the International Chamber of Commerce in Miami.
• A legal challenge under the Panama-Canada free trade agreement.
• A public relations push, offering mine tours to local and international audiences.

Public opinion on the mine appears to be shifting. A December 2023 poll by Doxa found that 44% of Panamanians supported permanently closing the mine, compared to 81% in January 2024, according to Mercadeo Planificado.

President Mulino, who took office in July 2024, is seen as more business-friendly than his predecessor. He has stated he will address the mine issue after passing social security reforms, which lawmakers are expected to vote on in the coming weeks.

In the meantime, Mulino has met with local mine suppliers, acknowledging the economic strain caused by the closure. The government is also conducting an environmental audit of Cobre Panama to assess potential risks and closure costs.

First Quantum has pledged full cooperation with the audit and submitted a preservation and safety plan. If approved, the company could export 121,000 metric tons of stockpiled copper concentrate, offering a potential temporary lifeline for both First Quantum and Panama’s economy.