First Quantum faces $20M monthly bill for Panama copper mine care

First Quantum Minerals (TSX: FM) will spend approximately $20 million a month to maintain its idled Cobre Panamá copper mine under a recently approved care and maintenance plan.

Roderick Gutiérrez, president of the Panamanian Mining Chamber, said the cost would be covered by selling copper concentrate stored at the site. The company currently has 121,000 tonnes of concentrate, though some has deteriorated after nearly two years of inactivity. Reprocessing the degraded material may not be economically feasible, Gutiérrez noted in an interview with local media.

The care mine plan includes updated environmental and legal protocols and is expected to take six to twelve months to implement, depending on equipment conditions. Oversight will involve ten government agencies, including Panama’s Ministry of the Environment.

Cobre Panamá, a $10-billion open-pit operation, was shuttered by presidential decree in late 2023. Before its closure, the mine accounted for roughly 5% of Panama’s GDP and generated about 40% of First Quantum’s annual revenue. Its shutdown has severely impacted both the company and the national economy.

Current President José Raúl Mulino has expressed interest in renegotiating the mine’s future under a model that prioritizes national ownership.  

“Let’s be smart and get the most benefit as Panamanians from a mine we already have,” Mulino said in May.

The President warned that fully closing the mine could take up to 15 years due to its scale and economic significance. The operation had supported tens of thousands of direct and indirect jobs.

Before the forced halt of operations, Cobre Panamá produced more than 330,000 tonnes of copper and was on track to reach an annual throughput of 100 million tonnes by the end of 2024, placing it near the top of the world’s copper throughput ranking.