The future of First Quantum Minerals’ massive copper mine in Panama remains uncertain after the upcoming presidential election in May. A Reuters review of campaign proposals and interviews with protest leaders suggests little chance of the mine reopening anytime soon.
Public Opposition Stalls Mine Project
The Cobre Panama mine, one of the world’s largest new copper mines, was shuttered in 2023 following protests demanding stricter environmental protections and more transparency in negotiations. These protests ultimately led Panamanian authorities to revoke First Quantum’s concession and enact a ban on all new metal mining permits.
The outcome of the May election is being closely monitored by metal traders and investors hoping for a potential revival of Panama’s mining sector. Eight candidates are vying for the presidency, with polls indicating a tight race. However, of the five leading candidates, three have pledged to uphold the mine closure, one proposes a public referendum on the issue, and the last has not taken a firm stance.
First Quantum Seeks Compensation Through Arbitration
First Quantum’s market value plummeted after losing its mining contract. The company is seeking $20 billion in compensation through international arbitration, arguing that Panama’s actions violated trade agreements. Panama’s government has vowed to defend its interests in court.
Legal experts believe Panamanian law might technically allow for a future reversal on the mine closure, but regaining public trust and political viability would likely require a public referendum or similar form of widespread approval.
The mining ban has pushed copper prices higher due to supply concerns. However, Panama’s economy appears resilient despite the lost mining revenue. A prolonged legal battle or hefty arbitration award could dampen investor confidence in other sectors.
Presidential Candidates Offer Varied Positions
While mining hasn’t been a central campaign issue, the frontrunners have expressed differing views. Leading candidate Jose Raul Mulino hasn’t addressed mining in his platform, while former president Martin Torrijos respects the public’s decision to close the mine. Romulo Roux also supports the closure and his running mate sees no plans to overturn the mining ban.
Current vice president Jose Gabriel Carrizo proposes a public vote on mining’s future, while Ricardo Lombana advocates for a constitutional amendment to permanently ban mining.
Source: Mining.com
