Cobre Panamá environmental audit ready to begin, says minister

[Ben Graham]

Panama is expected to have all information necessary to make a decision on First Quantum’s (TSX: FM) shuttered copper mine by the end of this year, according to its Minister of Commerce and Industry Julio Moltó.

Speaking with local media this week, Moltó confirmed that the terms of reference for Cobre Panamá’s environmental and comprehensive audit have been consolidated into a single review process. He added that the Ministry of Environment has already selected the firm responsible for conducting the audit, which was slated to begin this month.

“I understand that the company has been defined, and the audit should commence shortly, pending the awarding of the contract and allocation of resources,” he stated in an interview with Panamanian news outlet Telemetro Reporta.

“I estimate that this audit will take four to five months at most, so we should have essential information before the year ends. This will allow us to continue making informed decisions while ensuring the safe management plan remains in effect,” he added.

First Quantum Minerals’ stock rose 1.4% on Friday, showing strength in a week during which it set a new 52-week high. The company has a market capitalization of C$20.5 billion ($14.8bn).

Panama’s $10 billion copper mine faces tough road to restart

Idled copper mine

Cobre Panamá, located about 120 km west of Panama City, has been placed under care and maintenance since late 2023, when Panama’s Supreme Court ruled it to be unconstitutional following mass protests against First Quantum’s renewed mining contract.

Before its closure, the copper mine had been producing over 300,000 tonnes of the metal annually, making it one of the world’s biggest producers. At its height, it outputted 350,000 tonnes; that was in 2022, its last full year of production before the shutdown.

During its operating years, Cobre Panamá was a major contributor to the Central American nation’s economy, accounting for roughly 5% of its GDP. First Quantum estimates that the suspension has cost Panama as much as $1.7 billion in economic contributions.

Due to its economic importance, mine workers and contractors, as well as members of other unions and some local communities, have publicly pushed for its reopening. Panama, however, under the Presidency of José Raúl Mulino, has been cautious with his stance on Cobre Panamá; the environmental audit serves as the first step in determining the mine’s status before his administration can shed any light on its future.

First Quantum, meanwhile, has set a maintenance plan for the shuttered mine, which Mulino’s government deemed to be necessary for the parties to engage in further discussions on Cobre Panamá.