First Quantum Minerals Ltd. (TSX:FM) is set to incur approximately $20 million in monthly costs to maintain its idled Cobre Panamá copper mine, one of the largest copper operations in the Americas. The figure, confirmed by the Panamanian Mining Chamber, reflects the financial burden of a new care and maintenance plan recently approved by the Panamanian government.

The mine, a $10 billion open-pit project located in the Colón province of Panama, has remained inactive since late 2023, when a presidential decree ordered its shutdown amid legal and environmental controversies. The plan to maintain the site in a stable, non-operational state is expected to take between six and twelve months to fully implement, depending on the condition of existing infrastructure and machinery.

According to Roderick Gutiérrez, president of the Panamanian Mining Chamber, First Quantum will attempt to finance the monthly maintenance costs through the sale of copper concentrate that remains stored at the mine site. The company has stockpiled approximately 121,000 tonnes of concentrate, though Gutiérrez noted that a portion of this material has deteriorated over time due to prolonged exposure and lack of movement.

Some of the stockpiled copper concentrate has been sitting idle for nearly two years. Gutiérrez told local media that while a portion of it may still be sellable, the reprocessing of degraded material may prove to be economically unviable. The quality of the material, storage conditions, and reprocessing costs will determine the extent to which it can be used to offset the ongoing expenses of the care and maintenance program.

Multilateral Oversight and Environmental Protocols

The implementation of the maintenance plan involves coordination with ten Panamanian government agencies, including the Ministry of the Environment. Officials have emphasized the importance of strict environmental compliance during the care period, particularly due to the mine’s proximity to sensitive ecosystems and protected areas.

As part of the maintenance effort, updated legal and environmental protocols are being enforced to ensure that the mine remains in a condition suitable for potential future operations or long-term closure, depending on future policy decisions. These protocols include water treatment, tailings management, erosion control, and environmental monitoring.

While specific technical details of the updated care plan have not been disclosed, government officials have stated that regular inspections and compliance checks will be conducted throughout the duration of the maintenance phase.

Economic and Political Context

Cobre Panamá’s closure has had significant economic consequences, both for First Quantum and for Panama. Prior to its shutdown, the mine accounted for an estimated 5% of the country’s gross domestic product (GDP) and generated roughly 40% of First Quantum’s annual revenue.

The mine’s abrupt closure also affected thousands of direct and indirect jobs in the region. It disrupted local economies that had become heavily reliant on mining-related employment, services, and infrastructure.

The decision to shut down the operation was made by former President Laurentino Cortizo following widespread national protests and a Supreme Court ruling that declared the company’s mining contract unconstitutional. The ruling came amid growing public concern over environmental damage, lack of transparency in the concession process, and broader debates about resource sovereignty.

New Administration Signals Potential Shift

Since taking office, Panama’s current president, José Raúl Mulino, has indicated a potential policy shift regarding the mine’s long-term future. In public remarks made in May, Mulino said he would support renegotiating the mine’s role under a model that better reflects national ownership and public benefit.

“Let’s be smart and get the most benefit as Panamanians from a mine we already have,” Mulino said. While he did not provide a detailed roadmap, he acknowledged the economic importance of the site and cautioned that a full closure could take up to 15 years due to the mine’s scale and complexity.

Mulino’s remarks signal possible openness to renegotiating the terms of the mine’s operation or seeking a new structure that ensures greater returns for Panama. However, no formal negotiations or new contracts have yet been announced.

Former Production and Strategic Importance

Before operations were halted, Cobre Panamá was among the world’s leading copper-producing mines. It produced more than 330,000 tonnes of copper annually and was expected to reach a throughput capacity of 100 million tonnes per year by the end of 2024, placing it among the top global copper operations by processing volume.

The mine was regarded as a cornerstone of Panama’s industrial development and a significant player in the global copper supply chain, which has become increasingly critical due to rising demand linked to renewable energy infrastructure and electric vehicles.

The interruption of such a major supply source has had wider implications for the global copper market. Analysts have cited Cobre Panamá’s absence as a factor in tightening global copper inventories and upward pressure on prices, though its long-term influence will depend on the outcome of legal, political, and operational developments over the coming year.

As of early June, the situation remains fluid. First Quantum has not publicly released an updated forecast on when or if full operations might resume. The company is expected to continue engaging with Panamanian authorities as it manages the complex process of maintaining the mine in a non-operational state while preserving the possibility of eventual reactivation.

For now, the monthly care costs and legal oversight underscore the high financial and regulatory stakes of operating — or idling — a megaproject of this scale. Whether Cobre Panamá returns to production, is restructured under new ownership terms, or gradually winds down, will depend on decisions made in the months ahead by both the Panamanian government and First Quantum.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

Rio Tinto (ASX:RIO) has entered into a joint venture agreement with First Quantum Minerals (TSX:FM) to unlock the development of the La Granja copper project in Peru. The project, located at high altitude in Cajamara, Northern Peru, is one of the largest undeveloped copper deposits in the world, with an estimated resource of 4.32 billion tonnes at 0.51% copper.

Under the agreement, First Quantum will acquire a 55% stake in the project for $105 million and invest up to $546 million to sole fund capital and operational costs, taking the project through a feasibility study and towards development. The transaction is expected to be completed by the end of Q3 2023.

As the majority owner, First Quantum will operate the La Granja project, with initial work focussed on completing the feasibility study. Rio Tinto had acquired the La Granja Project from the Government of Peru in 2006 and has since carried out extensive drilling programs to expand the declared resource and understanding of the orebody, and established partnerships with host communities, local and national governments.

La Granja is currently the fourth-largest copper project in the world, and Peru is the world’s second-largest copper producer. The agreement between Rio Tinto and First Quantum Minerals is expected to boost the Peruvian mining industry and create new job opportunities in the region. The joint venture will also provide the necessary capital to develop the La Granja project, which is expected to become a large, long-life operation, benefiting the local communities and the country’s economy.

The joint venture agreement between Rio Tinto and First Quantum Minerals to develop the La Granja copper project in Peru is not only significant for the South American nation’s mining industry, but also for the two global mining giants involved. For Rio Tinto, the move further strengthens its copper portfolio, which was recently boosted by the acquisition of Turquoise Hill Resources and the launch of underground mining at Oyu Tolgoi in Mongolia.

On the other hand, First Quantum Minerals has been in the news lately for its dispute with the Panamanian government over royalties, which led to a temporary halt in operations at its Cobre Panama mine earlier this year. The two parties reached an agreement in March that guarantees a minimum annual income of $375 million to the Panamanian government, allowing the mine to resume operations.

With the La Granja project now on the horizon, First Quantum Minerals is expected to focus its attention on unlocking the potential of one of the world’s largest undeveloped copper deposits. The joint venture will inject the necessary funds to take the project through a feasibility study and towards development, which is likely to create new job opportunities in the region and benefit local communities.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

South America is home to some of the largest copper deposits in the world, and several exploration companies are working hard to discover new resources and expand existing ones. Here are the top three copper exploration companies in South America, along with some of their most notable intercepts.

Solaris Resources (TSX:SLS) (OTCQB:SLSSF)

Solaris Resources (TSX:SLS) (OTCQB:SLSSF) is a Canadian copper exploration company focused on the discovery and development of copper and gold deposits in the Americas. The company has a strong presence in South America, where it is actively exploring for copper and gold deposits in Ecuador and Peru.

The company continues to report regular exploration results expanding on its discoveries at what has been called a potential “superpit”. 

Warintza is considered a take-out target as the Company has defined a large 1.5Bt copper inventory, featuring a high-grade starter pit and low strip ratio, within a mining district offering major structural advantages from highway access, abundant and low-cost hydroelectric power, fresh water, labour and low elevation. The Company has de-risked the project by locking in a social license through an IBA signed with the communities, and freezing in place the regulatory and fiscal framework by signing an Investment Contract with the Government in December. The final de-risking item is completing project permitting, which is ongoing and expected in 2024 with the project being designated a “strategic priority project” by the Government. 

First Quantum Minerals (TSX:FM)

First Quantum Minerals (TSX:FM) is a Vancouver-based mining company with operations in Africa, Australia, and South America. Its flagship copper mine is the Cobre Panama project, located in Panama. The company has been exploring the region for years and has made several significant copper discoveries.

First Quantum has reported several impressive drill intercepts at Cobre Panama. One of the most notable was a 136-meter intersection of copper and gold mineralization, grading 0.63% copper and 0.35 grams per tonne of gold. This intercept was found in the southeast extension of the Cobre Panama deposit, and the company believes it has the potential to significantly increase the mine’s resources.

Anglo American (LSE:AAL)

Anglo American (LSE:AAL) is a multinational mining company with operations in Africa, Europe, and the Americas. Its copper operations are located in Chile, where it owns a 50% stake in the Los Bronces mine and a 100% stake in the Mantoverde mine.

Anglo American has reported several impressive drill intercepts at Los Bronces. One of the most significant was a 95-meter intersection of copper and molybdenum mineralization, grading 0.67% copper and 0.022% molybdenum. This intercept was found in the north zone of the mine, and the company believes it has the potential to increase the mine’s resources.

Teck Resources (NYSE:TECK)

Teck Resources (NYSE:TECK) is a Canadian mining company with operations in Canada, the United States, and Chile. Its copper operations are located in Chile, where it owns a 90% stake in the Quebrada Blanca mine.

Teck reported several intercepts at Quebrada Blanca since exploration began. One of the most biggest was in 2021; a 129-meter intersection of copper mineralization, grading 0.39% copper. This intercept was found in the QB2 deposit, which is currently under construction and expected to begin production in 2022. The company believes that QB2 has the potential to become a significant copper producer, with a projected mine life of over 25 years.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

Tertiary Minerals (LON:TYM) has signed a technical cooperation agreement with First Quantum Minerals (TSX:FM) to increase copper exploration in Zambia. This specific deal will include the Mukai and Mushima North project by Tertiary Minerals in the north-western province of Zambia. Mushima North is adjacent to First Quantum’s Trident project, including the Sentinel copper mine and the Enterprise nickel mine. Thanks to synergies between the properties and the new agreement, both companies will be able to boost copper exploration at the properties.

Executive Chairman Patrick Cheetham said in a statement: “This agreement will turbo-charge Tertiary’s Zambian exploration in these two key licence areas. We are set to benefit from FQM’s extensive and in-depth country experience, gained over many years of exploration and mine development in Zambia.”

Tertiary and First Quantum will establish a technical committee to work together to develop the two projects, which is located in an active exploration area for First Quantum. The Mushima North exploration licence is also in an active prospecting region for First Quantum. Tertiary and First Quantum will get together and form a technical committee to collaborate on the advancement of both initiatives.

First Quantum will also advise and assist Tertiary on the project’s technical matters and provide Tertiary with all of its historical exploration data for the two licence areas. The London-based miner said the agreement will provide them with the expertise of one of the world’s biggest copper producers, without any associated cost First Quantum. In return, Tertiary added, First Quantum will gain first-hand knowledge of new discoveries made and makes the company a future development partner thanks to the agreement.

Zambia is a focus for both companies, thanks to renewed confidence in the investment climate in the country. First Quantum had production of 435,000 tonnes of copper and 128,000 oz gold at Zambian operations in 2021, and the company approved a $1.25 billion expansion of the Kansanshi copper mine that aims to boost production further.

First Quantum has also recently approved a $100 million investment in the Enterprise nickel project that is expected to start producing in 2023 and is covered by the technical agreement. The company will ramp up production at the project with the goal of producing 30,000 tonnes of nickel concentrate per year.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.