Last week, First Quantum suspended processing operations at its Cobre copper mine in Panama.

First Quantum Minerals (FQM) has halted processing at its Cobre copper mine in Panama, in the latest escalation of a schism with Panama’s government over taxes and royalties. 

In December 2022, Panama's government ordered FQM to suspend operations after the miner missed a deadline to finalise a deal that would have increased royalty payments. Reports from earlier this year suggest that Panama has requested taxes of US$375M per year alongside royalties of 12-16% - much higher than current rates. In response, FQM threatened to close the operation. Earlier in February, Panama’s maritime authority ordered the suspension of FQM loading operations at a key port, effectively blocking copper exports from the mine. 

If a solution isn’t found the schism could have knock-on implications for Panama and the global copper market. Cobre contributes ~3.5% of Panama’s GDP, while the operation employs over 8,000 workers and contractors and sources goods and services from over 2,000 Panamanian companies. Meanwhile, the mine boasts over 2.9Bnt of proven and probable reserves and last year produced 350,438t, more than 1% of global supply. As at the end of December 2021, the mine life was 34 years.