Panama Demands First Quantum Drop Legal Action for Mine Talks

Panama is urging First Quantum Minerals (TSX: FM) to immediately withdraw its legal proceedings against the government if the company is serious about negotiating a restart of its shuttered Cobre Panama mine.

President Jose Raul Mulino announced that he has authorized the export of stockpiled copper concentrate from the open-pit mine, adding that First Quantum must compensate Panama since the material will be processed abroad.

“The concentrate is being wasted, and Panama has invested heavily in it,” Mulino stated during a press conference in Panama City. “The mine’s future will be handled with responsibility, prioritizing national interests.”

Cobre Panama was forced to shut down in 2023 after Panama’s Supreme Court ruled its mining contract unconstitutional. Before the closure, the mine contributed approximately 5% of the country’s GDP and 75% of its exports. Since then, First Quantum has kept the copper concentrate stockpiled on-site.

The Ministry of Commerce and Industry reaffirmed the government’s stance, stating that negotiations cannot proceed while legal actions against the Panamanian state remain active.

“Any potential discussions will depend on the immediate suspension of these proceedings. Panama will not accept pressure or imposed conditions that compromise its sovereignty,” the ministry said in a statement.

Once the legal dispute is resolved, the government will determine the best course of action for the copper concentrate, considering environmental and economic factors. “Decisions will be made transparently, responsibly, and in compliance with the law,” the ministry added.

First Quantum is seeking billions of dollars in damages due to the mine’s closure, with a final hearing postponed to 2026 to allow room for negotiations. The company says it has invested over $10 billion in Cobre Panama, including a port and a power plant.

Meanwhile, Panama is exploring options to integrate the mine’s thermoelectric plant into the national power grid without reactivating mining operations. “The sole objective is to boost electricity supply and ensure competitive pricing for residential and commercial users,” the ministry stated.

All future decisions regarding Cobre Panama will be carefully assessed to align with national interests, the statement concluded.

First Quantum CEO Tristan Pascall previously expressed a willingness to engage in constructive discussions with Panama’s government and people. “Arbitration is not the preferred outcome,” the company noted in its fourth-quarter report.

First Quantum has not yet responded to requests for comment.