Name of the Mine

Cobre Panama mine.

Location

The mine is located in the Donoso and Omar Torrijos Herrera Districts of Colón Province, Panama, about 120 km west of Panama City. 

Mine Owner/s

First Quantum Minerals.

Brief Description

Cobre Panama is one of the largest new copper mines to open in the past decade, and the first large-scale operation to be built in Panama.

Brief History

First Quantum Minerals acquired Inmet Mining Corporation in April 2013, thereby  gaining an 80% stake in Minera Panamá S A (MPSA) – the rights holder for the Cobra Panama project concessions since 1996.

First Quantum increased its effective ownership of MPSA to 90% in August 2017.

The 'Cobre Panamá Project Technical Report' states that, in December 2016, the Panama government signed and issued Resolution No 128, through which it extended mineral concessions, under Law No 9, enabling miners to continue activities for a second, 20-year term starting on March 1, 2017.

Consequently, in terms of the resolution and the concession agreement, MPSA had the right to explore for, extract, exploit, beneficiate, process, refine, transport, sell and market the copper, gold and other minerals on the Cobre Panama concessions.

However, in September 2018, the Supreme Court of Panama made a ruling with regard to the constitutionality of Law 9.At the time, First Quantum believed that the ruling did not affect the “legality of the MPSA mining concession contract itself, which remains in effect, and allows [for the] continuation of the development and operation of the Cobre Panama”.

The mine achieved commercial production in 2019.

However, in 2021, the Supreme Court’s ruling was upheld, forcing the company to start negotiations for a new mining concession – a process that took more than two years and concluded in October 2023.

On November 29, 2023, Reuters reported that the Supreme Court had ruled that First Quantum’s (new) contract was (also) unconstitutional.

Geology and Mineralisation

The project consists of several copper/gold/molybdenum/silver porphyry mineralised systems, which were first discovered in Panama during a regional geological survey by a United Nations Development Programme team in 1968.

The technical report states that the deposits occur at the southern margin of a large granodiorite batholith of mid-Oligocene age. Mineralisation is hosted in granodiorite, feldspar/quartz/hornblende porphyry and some andesite volcanics. Host lithologies and mineralisation are cross-cut by later dykes of either andesitic or felsic composition.

Higher-grade mineralisation is associated with intense quartz stockworks, and the dominant copper-bearing sulphide is chalcopyrite, with only minor bornite. Sulphide mineralisation is disseminated or as micro-veinlets and quartz-sulphide stockworks. Traces of molybdenite are commonly found in quartz veinlets.

Reserves

Cobre Panama had a total in-pit mineral reserve of 2.81-billion tonnes grading 0.38% copper, 58.26 ppm molybdenum, 0.07 g/t gold and 1.38 g/t of silver as at December 31, 2022.

Total stockpile reserves as at December 31, 2022, were estimated at 37-million tonnes, grading at 0.19% copper, 33.62 ppm molybdenum, 0.04 g/t gold and 0.82 g/t of silver.

Resources

As at December 31, 2022, Cobre Panama had a total measured and indicated resource of 3.35-billion tonnes grading at 0.37% copper, 0.006 % molybdenum, 0.07 g/t gold and 1.34 g/t of silver.

It had a total inferred resource of about 1.09-billion tonnes grading 0.26% copper, 0.005% molybdenum, 0.04 g/t gold and 1.09 g/t of silver.

The total stockpile resource, as at December 31, 2022, was estimated at 37-million tonnes grading at 0.19% copper, 33.62 ppm molybdenum, 0.04 g/t gold and 0.82 g/t of silver.

Type of Mine

Openpit.

Mining Method

Conventional drill-and-blast operation.

Major Infrastructure/Equipment

The mine is accessible from Panama City using the Pan-American Highway and secondary paved and gravel roads.

It uses ultraclass electric shovels and ultraclass haul trucks. Four in-pit semimobile primary crushers feed the two overland conveyors which lead to the secondary crushers within the main processing complex.

The three 28 MW semiautogenous mills and four 16.5 MW ball mills installed at Cobre Panama are some of the largest installed anywhere in the world.

Copper sulphides are concentrated by flotation, and concentrates are delivered by slurry pipeline from the main processing plant to the filter plant co-located at First Quantum’s purpose-built port facility in the Caribbean.

Tailings are stored and water is reclaimed from the centreline-construction tailings storage facility.

The project is powered by a 300 MW power generation plant at the port.

Prospects

First Quantum published a statement on December 1, 2023, noting it was seeking “additional details” pertaining to the Supreme Court’s ruling that its contract to operate the mine was unconstitutional.

The statement followed comments by Panama President Laurentino Cortizo, who noted that authorities would start the process for the “orderly and safe closure of the mine”.

The company noted that it was suspending its production guidance for Cobre Panama.

First Quantum subsidiary MPSA initiated arbitration before the International Court of Arbitration on November 29 to protect MPSA’s rights under the 2023 concession agreement that the Panama government agreed to earlier in the year.

“The company and Panama agreed to a new concession agreement contract in March 2023, which, following due public consultation and regulatory signoff was approved by Contract Law 406 by the National Assembly on October 20, 2023,” First Quantum’s statement noted.

Further, it stated that the development of the mine had been governed by a concession agreement contract first signed by Panama and MPSA in February 1996 and approved by Contract Law 9 by the National Assembly in February 1997.

“On the basis of that contract, Cobre Panama has invested $10-billion in the mine and associated infrastructure, including a power plant, cross-country transmission lines, roads and a port.” 

By December 4, 2023, First Quantum CEO Tristan Pascall, during an interview with Panamanian newspaper La Prensa, noted that the company was exploring methods to sustain its finances in the long term, in the wake of the ruling.

Reuters noted that the company had notified buyers that it would not be able to meet agreements, owing to force majeure.   

Moreover, the news agency reported on December 11 that Panama’s Trade and Industry Ministry had ordered First Quantum to end operations at the mine, with the Ministry reportedly sending a “formal advisory” that the mine must "end extraction, processing, refining, transportation, export and sales activities". 

It would also have to take measures to secure the facilities and avoid environmental damage.

The mine had reportedly requested government authorisation to retrench more than 4 000 employees.

Reuters added that the mine’s closure could cause Panama to cut its 2024 growth forecasts, as the mine accounts for about 5% of Panama’s gross domestic product.

Contact Details

First Quantum Minerals

Tel  + 1 416 361 6400

Email info@fqml.com 

Sources

First Quantum Minerals. https://www.first-quantum.com

First Quantum Minerals. Cobre Panama.

First Quantum. Cobre Panama Reserves & Resources

First Quantum Minerals. Cobre Panamá Project Technical Report (March 2019).

First Quantum Minerals. First Quantum Comments on Developments in Panama (December 1, 2023).

Reuters. https://www.reuters.com

Reuters. Explainer: What happens next after Panama's top court strikes down First Quantum contract? (November 28, 2023).

Reuters. First Quantum initiates international arbitration on Cobre Panama mine (December 1, 2023).

Reuters. First Quantum CEO: Long-term sustainability uncertain if Panama operations end (December 2, 2023).

Reuters. Panama govt orders First Quantum to end mining operations, country unit says (December 8, 2023).