Cobre Panama restart hopes rise as thousands return to mine

First Quantum Minerals’ (TSX: FM) hopes of restarting its halted Cobre Panamá copper mine received a boost Tuesday as government officials met workers and suppliers while weighing the giant operation’s future.

Commerce and Industries Minister Julio Moltó toured the Donoso, Omar Torrijos Herrera and La Pintada regions to meet mine workers, local authorities and suppliers. Their proposals will be considered by the government’s interministerial commission that is reviewing the halted mine’s future.

Panama’s government authorized First Quantum in April to remove and process stockpiled ore. The activity now supports about 3,200 direct jobs and more than 3,000 indirect positions, according to figures presented during the meetings. More than 91% of workers are Panamanian and 17% are women.

Moltó said the discussions demonstrated the depth of skilled labour developed around Cobre Panamá, highlighting professionals and technicians who have spent years building careers around the operation.

Restart groundwork

For First Quantum investors, the consultations add to signs of gradual activity around an asset that was once one of the company’s biggest earnings and cash-flow generators.

The company restarted one of the mine’s three milling trains in May and produced its first concentrate in June, CEO Tristan Pascall said last month when First Quantum released second-quarter results. Processing subsequently shifted to a second train as part of a maintenance cycle.

By the end of June, First Quantum had processed 2.1 million tonnes of stockpiled ore and produced about 3,200 tonnes of contained copper. Its first shipment is expected this month.

About 38 million tonnes of stockpiled ore remain, containing an estimated 70,000 tonnes of recoverable copper. First Quantum expects that inventory to support roughly 12 months of processing at the current rate..

The processing of stockpiles also keeps critical pieces of Cobre Panamá, including the port and power plant, functioning while the government considers its longer-term decision.

That could matter to the speed of any restart. First Quantum estimates that Cobre Panamá would require about 6,000 workers at full operation, and the company has identified hiring and training specialized employees as a potential constraint.

Once a framework is agreed and the required approvals are secured, the company estimates Cobre Panamá could reach 80% to 90% of capacity within six to nine months.

Road ahead

Cobre Panama has remained idle since late 2023, when Panama’s Supreme Court ruled First Quantum’s 20-year mining contract unconstitutional following widespread environmental and governance protests. The shutdown erased about 4.5% of Panama’s gross domestic product, according to IMF data, removed more than 1% of global copper supply and eliminated about 40% of First Quantum’s revenue.

Since taking office in 2024, President José Raúl Mulino’s administration has authorized sales of stockpiled concentrate, restarted the mine’s power plant and completed an environmental audit that found the operation was 87.7% compliant with its environmental commitments. First Quantum has also suspended its $20 billion (C$28 billion) arbitration claim against Panama while discussions over the mine’s future continue.

First Quantum shares fell 1.5% to C$43.77 Tuesday afternoon in Toronto, valuing the company at about C$37 billion ($26 billion). The stock has traded between C$22.21 and C$46.36 in the past year.