Bnamericas Interview – Mea culpa and reinvention of First Quantum Minerals after Cobre Panama suspension

This year will be crucial for First Quantum Minerals (FQM), as Panama’s president, José Mulino, pledged to make a decision on the operational continuity of Cobre Panama once an environmental audit of the Canadian company’s copper and gold mine is completed, as well as a social security reform.

The reopening would be key to boosting production of the critical mineral at the mine, which in 2023 reached 331,000 t thanks to an expansion before it was halted following a Supreme Court ruling that declared the concession contract unconstitutional.

When it was active, Cobre Panama contributed 5% of the country’s GDP and 75% of exports and generated around 40,000 direct and indirect jobs.

There are 1,300 people working at the mining facilities, but the number could be reduced depending on the implementation of a safe preservation program that would make it possible to dispatch more than 120,000 tons of copper concentrate that are in storage awaiting approval from the Panamanian authorities.

On lessons learned and more, BNamericas talks to John Dean, head of the Cobre Panama mine.

BNamericas: The government has prioritized the debate on social security reform, but then it would move forward with Cobre Panama. What are your views on this?

Dean: President Mulino has been consistent on this issue. He remains focused on advancing social security legislation in Panama, but has commented that he intends to address the mine issue early this year, once the social security reforms are resolved.

BNamericas: What would be the environmental consequences of not reaching a decision this year regarding the sale of the copper concentrate stored at the mine?

Dean: That material is in the port, it’s 121,000 dry metric tons. The copper content and quality is not affected by the extended storage period, but we are still concerned about the sulfur oxidation in that material, and that still poses some safety and environmental risks. The best thing for the environment and for everyone there is for that material to be cleared in the short term.

BNamericas: How much of this sale would be left for the government?

Dean: Panama will certainly benefit from the export of the concentrate through royalty payments, and this will also provide the financial resources to pay the local companies that continue to support the safe management of the site and our 1,300 Panamanian employees who remain on site to care for the environment.

BNamericas: If the government does not agree to renegotiate the contract and decides to close Cobre Panama for good, what will FQM’s strategy be?

Dean: We are 100% focused on moving towards a solution in Panama. We look forward to working constructively with the government through a transparent process to reach a solution for Cobre Panama that is in the best interest of the country and its people.

BNamericas: What legislative challenges exist to achieve a closure plan or an eventual restart of operations?

Dean: The solution for the future of the mine has to respect the Supreme Court ruling and Panamanian law. The good news is that viable solutions exist, and responsible development of mineral resources is fundamentally enshrined in Panama’s Constitution. The key will be to re-establish social acceptance through a transparent process to find a solution that generates more concrete benefits for the Panamanian people.

BNamericas: How much has the Cobre Panama stoppage affected the company’s ebitda? What measures were implemented to compensate for it?

Dean: In February 2024, First Quantum Minerals secured a comprehensive refinancing package that included an amendment and extension of our corporate loans, a US$1.6 billion bond offering, a US$1.15 billion share purchase offer and a US$500 million copper prepayment agreement. These initiatives and the strong performance of First Quantum’s global operations provide stability as we work toward a fair and lasting solution for Cobre Panama.

BNamericas: What are the main lessons learned from the operational suspension?

Dean: This marked the beginning of a period of reflection and transformation. We have reimagined what it means to be a true partner of Panama and have adopted a new vision for the future of Cobre Panama, based on trust, transparency and a meaningful commitment to people.

While we are proud of our track record as responsible miners and environmental stewards, going forward we are committed to listening more, engaging more actively, and strengthening our relationships with communities and stakeholders.

One of the clearest lessons is that technical excellence alone is not enough. Data, facts and compliance with high environmental and operational standards are important, but they must be accompanied by humility, open dialogue and genuine collaboration. Trust is earned through actions that demonstrate a real commitment to the well-being of people, the environment and the future of Panama.

The suspension of the mine also reinforced the interconnectedness of our operations with the economy and society at large, impacting tens of thousands of jobs, local businesses, and social programs. For many, the magnitude of this impact became apparent only after the mine’s suspension. This has underscored the need for mining to generate more direct and tangible benefits for Panamanians, not only through economic contributions, but by working hand-in-hand with communities to develop opportunities in education, health, infrastructure and local entrepreneurship.

We have also learned that transparency is more than just publishing the results of environmental audits and sustainability reports. It is about broadening engagement and strengthening our connection with society, creating spaces for dialogue and collaboration with the widest range of stakeholders.

BNamericas: What is FQM doing to improve transparency? Dean: We have opened our doors to public site visits, which has allowed Panamanians to see firsthand how we operate. We have also extended our reach throughout the country, taking part in hundreds of engagement events to better connect with the Panamanian people and discuss how we can better respond to their needs.

Our vision for the future of Cobre Panama goes beyond producing the copper the world needs to drive the green energy transition. It is about doing so with the utmost transparency and respect for people and the environment. It is about creating a legacy of tangible benefits for the country and forging a future in which Cobre Panama is a source of pride, a leader in reforestation and a true ally of the Panamanian people.

The transformation we have experienced in Panama has reinforced our commitment to apply these lessons to our operations and projects internationally to strengthen First Quantum’s reputation as a partner of choice for host communities, governments and employees.

BNamericas: What sustainability initiatives are you developing or hope to implement at Cobre Panama?

Dean: Cobre Panama’s environmental and social impact assessment [ESIA] was approved in 2011 and is unique in the industry in applying the highest possible standards for environmental management and biodiversity protection.

The commitment under the ESIA is clearly positive for the environment, meaning that not only would the site be rehabilitated at the end of Cobre Panama’s useful life, but twice the area of the mine, including areas outside the operation, would be reforested.

https://www.bnamericas.com/en/interviews/first-quantum-minerals-mea-culpa-and-reinvention-after-cobre-panama-suspension