Panama audit boosts Cobre Panama restart hopes

Panama’s environment ministry said a final audit found First Quantum Minerals’ (TSX: FM) suspended Cobre Panama mine complied with most environmental requirements, though deficiencies remain in biodiversity management, ecological restoration and environmental monitoring.

The long-awaited audit, conducted by Société Générale de Surveillance (SGS), reviewed the project’s legal, fiscal, environmental and operational performance, including 370 commitments under its Category III Environmental Impact Assessment and environmental management programs. The report found overall compliance approaching 88%, which removes one potential obstacle to a mine restart.

“The findings do not represent insurmountable structural failures, but rather specific points that require monitoring and corrective action,” the ministry said according to local newspaper La Estrella de Panamá.

“We trust that this report will contribute to a more informed and evidence-based discussion about the next steps, allowing the country to responsibly, transparently, and with full information [decide] on the future of the project,” the company said.

The report could play a key role in determining the future of Cobre Panama. Earlier this month, Panama’s government created an inter-agency task force to evaluate the mine’s legal, economic, technical and environmental implications.

The review is expected to help guide the group’s recommendations and any broader decision on whether to restart one of the world’s largest copper mines.

The operation produced about 350,000 tonnes of copper in 2022 and accounted for roughly 5% of Panama’s gross domestic product before it was shut down. 

Key gaps

The review found the project generally complied with environmental and operational requirements but recommended stronger administrative controls, improved biodiversity management, enhanced ecological restoration efforts and better coordination of environmental monitoring. It also examined environmental risks, cumulative impacts and mitigation measures, alongside infrastructure performance and maintenance standards.

Opposition to a restart remains significant. Dozens of demonstrators marched in Panama City last month, rejecting any effort to reopen the mine and urging President José Raúl Mulino’s government to respect public opposition. The protests revived tensions seen during the mass demonstrations of October and November 2023 that culminated in the mine’s closure.

First Quantum has argued the shutdown has imposed a steep economic cost on Panama. The company estimates the suspension has resulted in about $3.5 billion in lost economic contribution over the past two years, underscoring the financial stakes as the government weighs the project’s future.