| Cobre Panamá | |
| Coordinates: | 8°51'07.1"N 80°38'41.2"W |
| State/Province: | Colón Province |
| Country: | Panama |
| Owner: | First Quantum Minerals[1] |
| Official Website: | www.cobrepanama.com |
| Acquisition Year: | 2013 |
| Products: | Copper, Gold, Silver |
| Opening Year: | 2019 |
Cobre Panamá is an open-pit copper mine in Panama, located 120km (80miles) west of Panama City and 20km (10miles) from the Caribbean Sea coast, in the district of Donoso, province of Colón. The mine consists of four zones totalling 13,600 ha (34,000 acres). The main deposits are at Botija, Colina and Valle Grande. With 3.1 billion t (6.8 trillion lb) of proven and probable reserves, Cobre Panamá is one of the largest new copper mines opened globally since 2010. It is located next to the Petaquilla mine.[2] For 2024, Cobre Panamá is made up of a Copper Mine, Process Plant, Power Plant and the International Port of Punta Rincón.[3] [4] Commercial production started in September 2019.[5] At full current capacity, the plant will process 85 Mtpa of ore to produce more than 300,000 t (660 million lb) of copper per year along with gold, silver and molybdenum. This is equivalent to 1.5% of global copper production as of 2023.[6] The operation has a 34-year mine life. The three 28 megawatt SAG mills and four 16.5 megawatt ball mills installed at Cobre Panamá are the largest installed in the world up to the year 2020, except for the Sentinel mine in Zambia, also owned by First Quantum Minerals. The project is powered by a 300 MW coal fired power generation plant located at the port built for this mining operation.
As of 2017, First Quantum Minerals Ltd. has a 90 per cent equity interest in Minera Panamá, S.A. ("MPSA"),[7] the Panamanian company that holds the Cobre Panama concession. The remaining equity is owned by Korea Resources Corp. (KORES, 10%).
In November 2023, during the protests in Panama, Jiangxi Copper, a Chinese company, became the largest shareholder of First Quantum, increasing its stake in Minera Panama from 18.3% to 19.5% by purchasing 1.35 million shares.[8]
The initial exploration of the site began in 1968.[9] The first discovery of copper was made in 1969, and by 1970, detailed exploration and feasibility studies were underway. In 1997, Inmet Mining Corporation acquired the project. The development of the mine began in 2011, and construction started in 2015.[10] [11]
This mine project was owned by Inmet Mining until 2013, when this company was taken over by First Quantum Minerals Ltd. (FQM).[12] Construction continued over the next six years until 2019. Cobre Panamá represents a total US$6.2 billion investment, partly financed by deposits in the amount of US$1,356 million from Franco-Nevada against future deliveries of gold and silver produced by the mine.[13]
By 2017, the project achieved 50% construction completion, and by 2018, the project was 80% complete.[14] [15] The mine reached its first production milestone in 2019, producing its first copper concentrate. In September 2019, it achieved commercial production, and by February 2020, it reached an annualized production rate of 300,000 tonnes of copper.[16] [17]
Cobre Panamá maintains high environmental standards in its operations. Since 2011, the project has included an Environmental and Social Impact Assessment (ESIA) to address and reduce environmental impacts.[18] [19] Key efforts involve reforestation, with over 1,000 hectares replanted, and initiatives to protect local wildlife and habitats.[20]
Additionally, Cobre Panamá financially supports the administration of the Omar Torrijos Herrera National Park and the Santa Fe National Park.[21] [22] The project also emphasizes proper waste management, recycling, and reducing its carbon footprint. Cobre Panamá works with local communities and stakeholders to ensure responsible environmental practices throughout its mining operations.[23]
Cobre Panamá established a reference collection to support environmental monitoring and research. This collection includes over 60,000 samples of local flora and fauna to help track biodiversity and ecological changes over time.[24] Additionally, the project features the Cobre Panamá Biodiversity and Environmental Education Center, which educates the public about the region's natural history and the mining process.[25] The museum, located in the town of Coclé, houses exhibits on local ecosystems, conservation efforts, and the technological aspects of mining.[26]
Cobre Panamá invested $160 million in social development programs over the past decade. These programs focus on improving education, healthcare, and infrastructure in the local communities surrounding the mine. The initiatives include building schools, health centers, and roads, as well as providing scholarships and vocational training to local residents.[27] [28]
The original concession granted to Minera Panamá, S.A. ("MPSA") in February 1996 and affirmed by Panamanian contract-Law No. 9 in 1997 became questionable after a ruling of the Supreme Court in September 2018, that Law 9 is in conflict with the constitution of Panama. Shortly thereafter, the Government of Panama issued a statement affirming support for Cobre Panamá and considering the MPSA mining concession as valid. On 22 December 2021, the Official Gazette published the unconstitutionality of Law 9. MPSA and First Quantum Minerals claim, that the ruling concerning Law 9 is not retroactive, so that the contracts signed before 2018 are not affected. During January 2022, the Government of Panama made proposals for a new contract including future payments and royalties to be imposed on MPSA. Such an agreement would have to be approved as legislation by the National Assembly.[29]
First Quantum's subsidiary MPSA made proposals to the Government of Panamá including yearly payments of US$375 million in tax and royalty revenue. These payments were offered under the conditions that metal prices and profitability of this mine would not drop significantly. The Government of Panama announced plans to order suspension of operations at this mine after First Quantum missed a deadline for an agreement to increase its payments to the government.[30] The original contract, alongside other contracts entered into by historic Panamian Governments, have been viewed by many analysts as too generous to businesses. [31] After a closure of the mine during two weeks, operations resumed and the terms and conditions of a refreshed concession contract between Minera Panamá S. A. and the Government of Panama have been announced on March 8, 2023.
In October 2023, the National Assembly approved the controversial bill 1100 in its third debate, which has led to multiple protests in the country.[32] These protests led to a moratorium on metallic mining throughout the country, "for an indefinite term", excluding already approved concessions, through Bill 1110, approved with 59 votes in favor by the National Assembly on November 3, 2023.[33]
See also: 2023 Panamanian protests. On November 28, in a unanimous ruling, the Plenary Session of the Supreme Court of Justice declared that Law 406 of October 20, 2023, which approves the mining concession contract entered into between the State and Sociedad Minera Panamá, S.A. was unconstitutional.[34] [35] Panama president said the Minera Panamá copper mine would be closed, hours after the country's Supreme Court declared its contract unconstitutional.[36] [37]
Following Panama's 2024 general election, the mining company expressed its anticipation of engaging in dialogue with the new government. In its latest statement, the company noted, "We look forward to a dialogue with a new government and working together once it takes office to find a resolution that is in Panama's best interest."[38] [39]
Royal Bank of Canada analyst Sam Crittenden commented on José Raúl Mulino's victory, stating that it is a positive development for First Quantum. However, he also emphasized the existing uncertainty surrounding the Cobre Panama project and the need to improve public perception of mining. Crittenden highlighted that negotiations with the new government are necessary before any potential reopening of the project.[40] [41]