A Canadian mining company asked Panama “r u still mine?” and got a crushing response.
What happened: A Panamanian government commission recommended that President José Raúl Mulino negotiate the reopening of the Cobre Panama copper mine — operated by Canadian miner First Quantum Minerals — though only as a means to fund its eventual closure.
The ruling, which seemingly came as a surprise, sent shares of First Quantum plummeting by over 30% before trading on the Toronto Stock Exchange was halted.
Catch-up: In 2023, mass protests disrupted operations at the mine, with activists decrying the mine’s environmental impacts and a deal they viewed as unfavourable and exploitative. Later that year, Panama’s Supreme Court ruled that the law approving the deal between the country and First Quantum was unconstitutional; Panama’s president then ordered its closure.
Mining operations have been paused ever since, but First Quantum had been working with the Panamanian government toward a potential revival.
Why it matters: For one, it’s bad news for one of Canada’s largest miners. Cobre Panama accounted for about 40% of the company’s revenue when it was up and running. While it could oversee operations for a few more years, it won’t be anywhere near its original 20-year deal.
Plus: Cobre Panama accounted for around 1.5% of the copper supply. The metal — which is used in pretty much all electrical wiring — is already in short supply, with an S&P report from this year warning that continued shortages pose “systemic risk” to global economic growth.
Bottom line: President Mulino still needs to give the recommendation a final approval, but bucking the report could be politically contentious. Even though there has been economic fallout from the mine shutting down, many Panamanians are still vehemently against it.—QH
