First Quantum nears stockpile processing at Cobre Panama copper mine

First Quantum Minerals (TSX: FM) welcomed Panama President Jose Raul Mulino’s plan to allow the removal and processing of stockpiled ore at its shuttered Cobre Panama copper mine, calling it a step toward stabilizing the site while discussions continue on its long-term future.

The Canadian miner said the government began executing a care and maintenance plan last year in preparation for processing about 38 million tonnes of ore mined before operations were suspended in 2023. 

The stockpile is expected to yield about 70,000 tonnes of copper, with proceeds from concentrate sales helping offset preservation and maintenance costs in 2026, depending on regulatory timing. 

Chief executive Tristan Pascall said the forthcoming permit is a positive development but does not amount to a reopening of the mine, adding that First Quantum remains committed to dialogue to resolve the dispute.

The company said it had revised its copper production guidance for the next two years. It nows expects to generate 375,000 to 435,000 tonnes of copper this year; 410,000 to 470,000 tonnes in 2027 and 430,000 to 490,000 tonnes in 2028.

BMO Metals analyst Matt Murphy said the bank sees the guidance adjustments as “a modest negative”, as First Quantum’s 2026 copper production guidance was reduced by about 15,000 tonnes. He noted the market may take some comfort in the likelihood that the miner could begin processing stockpiled ore at Cobre Panama in the coming months.

Murphy added that while 2027 guidance was also lowered by 20,000 tonnes, the 2028 production range represents a 20,000-tonne year-over-year increase.

Initial actions

The Mulino administration last year began taking steps to extract value from the idled mine, delivering key measures by the fourth quarter that included royalty payments, the launch of an independent audit and a partial restart of on-site power generation.

Authorities also sold more than 122,000 tonnes of copper concentrate stored at the site, generating nearly $30 million in royalties that were directed to public works such as health centre upgrades, school expansions, road repairs and improvements to water and electrical systems. 

The government hired an independent consultancy to audit Cobre Panama’s environmental, social, legal and fiscal compliance, with site inspections carried out by officials in November and December and the audit expected to be completed in April 2026.

The plan allowed for the restart of the mine’s power plant, with the first 150-megawatt unit commissioned in the fourth quarter and reaching design capacity. The plant is now operating at an average of about 120 MW to support preservation activities and supply Panama’s national grid, while a second 150 MW unit is scheduled to be commissioned this month.

First Quantum and government officials said removing, processing and exporting the stockpiled ore would reduce environmental and operational risks linked to long-term storage, including the potential for acid rock drainage, while providing feed for the tailings management facility.

Timeline

On a preliminary timeline, processing could begin about three months after formal regulatory approval and take roughly one year to complete.

The work is expected to provide an economic boost, adding about 700 direct jobs to the current workforce of roughly 1,600, alongside indirect employment in transportation, logistics, equipment supply and food services.

Pascall said the company supports the President’s call for transparency and engagement and remains committed to dialogue to achieve an amicable and durable resolution at Cobre Panama for Panama and its people.

First Quantum said all activities will be carried out in coordination with the government and in strict compliance with the approved plan. 

The mine once supplied about 1% of global copper production, and its closure has weighed on both Panama’s economy and First Quantum’s financial performance. Before the shutdown, Cobre Panama produced 350,000 tonnes of copper in 2022, accounting for about 5% of Panama’s GDP. According to the company, would have delivered $1 billion to the treasury and $2 billion to local suppliers if operations had continued. 

Mulino said earlier this week the government aims to decide on the mine’s future by June.

First Quantum is scheduled to release its fourth-quarter and full-year 2025 financial and operating results on Feb. 10, after the close of trading in Toronto.