Cobre Panamá is a large open-pit copper mine in Panama, located 120 km (75 mi) west of Panama City and 20 km (12 mi) from the Caribbean Sea coast, in the district of Donoso, Colon province, in the Republic of Panama. The mine consists of four zones totalling 13,600 ha (34,000 acres). The main deposits are at Balboa, Botija, Colina and Valle Grande. With 3.1 billion t (6.8 trillion lb) of proven and probable reserves, Cobre Panama is one of the largest new copper mines opened globally since 2010. It is located next to the Petaquilla mine.^[2]

This mine project was owned by Inmet Mining until 2013, when this company was taken over by First Quantum Minerals Ltd. (FQM).^[3] Construction continued over the next six years until 2019. Cobre Panama 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.^[4]

Commercial production started in June 2019.^[5] At full current capacity, the plant will process 85Mtpa 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-hours (100 GJ) SAG mills and four 16.5 megawatt-hours (59 GJ) ball mills installed at Cobre Panama 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 306 MW coal fired power generation plant located at the port built for this mining operation.

Ownership

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%).^[1]

Concession

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 of Panama 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 Panama 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.^[8]

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.^[9] The original contract, alongside other contracts entered into by historic Panamian Governments, have been viewed by many analysts as too generous to businesses. ^[10] 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 Panamanian congress approved the controversial bill 1100 in its third debate, which has led to multiple protests in the country.^[11] 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 (AN), on November 3, 2023.^[12]

Unconstitutionality of the contract and total closure of the Cobre mine, Panama

On November 28, 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. is unconstitutional, a ruling issued unanimously.^[13][14]Panama president said the Minera Panamá copper mine would be closed, hours after the country's Supreme Court declared its contract unconstitutional.^[15][16]

References