Grupo Mexico is among several firms considering bids to buy a Spanish copper mine from First Quantum Minerals, as the Canadian metals producer seeks to bolster its balance sheet after its flagship mine in Panama was ordered to shut down.

First Quantum initiated a process to sell its Las Cruces mine in southern Spain in December after the sudden closure of the Cobre Panama mine left the company facing financial uncertainty, according to people familiar with the matter, who asked not to be identified discussing confidential information. Las Cruces, one of First Quantum’s smallest operations, is valued at less than $1-billion, the people said.

Las Cruces would give Grupo Mexico, the conglomerate controlled by Mexican billionaire German Larrea, another opportunity to expand in Europe after it failed to acquire a different Spanish copper mining complex in 2021. Grupo Mexico previously bid on nearby mining operation Minas de Aguas Tenidas, known as Matsa, but lost out to Australian producer Sandfire Resources, which bought the asset for about $1.9-billion.

First Quantum and Grupo Mexico declined to comment.

Analysts have recommended First Quantum sell assets to shore up its balance sheet after the setback at Cobre Panama. The giant mine generated 78% of First Quantum’s operating profit in the first nine months of last year, according to a company filing. Without the Panama operation, analysts have warned that First Quantum is at risk of breaching debt covenants later this year.

The Las Cruces mine is undergoing a transition from an open-pit operation that reached the end of its life in 2021 to an underground operation poised to extend its life by 18 years or more, according to a company presentation. The extension includes a refinery designed to produce approximately 72 000 tons of copper cathode annually, which is shipped as final product.

Copper assets have attracted interest from mining companies that expect demand to surge as a result of the energy transition, and the bullish outlook has already sparked a surge in dealmaking.