Panama President rules out new mining contract law with First Quantum

Panama will not offer a new mining contract law to Canada’s First Quantum Minerals (TSX: FM), President José Raúl Mulino said amid an ongoing dispute that has kept the company’s $10 billion Cobre Panamá copper mine shuttered since late 2023.

Speaking at an industry event in Panama City, Mulino said the path forward remained uncertain, but noted he was open to forming an association with First Quantum. 

“I cannot yet tell you what the path forward will be; the only path that will not exist is a contract law, and I announce that here: There will be no mining law contract, period,” Mulino said, according to local media.

He stressed that any new mining law tied to a contract, such as the 406 law deemed unconstitutional by the previous government, would require approval from the national assembly. He said the assembly was not willing to back such a deal. Instead, he proposed a “real partnership” — a structure that would make clear the mine belongs to Panama and its people.

Mulino noted that if the decision is made to close the mine permanently, the process could take up to 15 years due to its scale.

“It’s a problem that implies tens of thousands of direct and indirect jobs,” he said. “Let’s be smart and get the most benefit as Panamanians from a mine we already have.”

The president has not yet met with First Quantum’s executives, though the company dropped its arbitration case against Panama—one of Mulino’s conditions for resuming talks.

Cobre Panamá, Central America’s largest open-pit copper mine, produced over 330,000 tonnes of copper in 2023 before operations were halted. 

The mine was on track to become a 100-million-tonne-per-year operation by the end of 2024, which would have placed it among the world’s largest copper producers.

Cobre previously accounted for roughly 5% of Panama’s GDP.