A Panamanian ministerial committee has recommended an “orderly closure” of the idled Cobre Panamá copper mine, with the site generating the revenue needed to fund its own shutdown.
The committee, comprising three ministers, presented its recommendations to President José Raúl Mulino on Wednesday following an assessment of the economic, environmental, legal, and social implications of the mine’s future.
Under the proposal, the government would negotiate with First Quantum Minerals (TSX:FM) over a framework that could allow operations to generate revenue during the closure process, rather than leaving the Panamanian state responsible for the cost.
The committee says the process should ultimately result in a controlled closure with no possibility of an extension, while also addressing outstanding international arbitration proceedings.
Panama’s Economy and Finance Minister Felipe Chapman said the cost of closing the mine should be borne entirely by the operation.
Cobre Panamá has been largely idled since late 2023, when Panama’s Supreme Court unanimously ruled the law approving First Quantum’s mining concession contract unconstitutional.
Before its shutdown, the operation accounted for up to 1.5% of global copper production, according to First Quantum.
Next steps
While the court ruling invalidated the concession contract, it did not determine what should ultimately happen to the mine site, a distinction highlighted by Mulino on Wednesday.
“The ruling closed the contract, but did not resolve what to do with the site,” Mulino said in a press conference, adding that he would review the committee’s recommendations with his cabinet and legal advisers before making a decision.
The committee’s recommendation therefore does not amount to approval to fully restart the mine.
First Quantum is already processing previously mined stockpiled ore at Cobre Panamá under a government-approved program, but the company says this does not constitute a reopening of mining operations.
Commerce and Industries Minister Julio Moltó has also cautioned that an orderly closure would be a lengthy process that could take years.
A resumption of Cobre Panamá could provide a boost to global copper supply at a time when the market is facing widespread mine disruptions and a shortage of major new discoveries.
Write to Jackson Chen at Mining.com.au
Main Image: Cobre Panamá
