Focus to Peruvian projects after Panama difficulties

News Analysis




Focus to Peruvian projects after Panama difficulties

First Quantum Minerals will attempt to fast-track project developments in Peru.

After losing the right to operate its Cobre Panama copper mine in Panama, Canadian miner First Quantum Minerals (FQM) is now looking to accelerate its copper projects in Peru. The Cobre Panama mine was an integral part of the company’s copper operations, accounting for 40% of the company’s revenue in 2023. The copper mine has been placed under care and maintenance while plans to officially close the mine have started.

FQM’s assets in Peru include the La Granja, Haquira and Taca Taca projects. The La Granja project has a 40-year mine life and is predicted to have the capacity to produce approximately 500ktpy of copper, plus additional metal by-products. The Haquira is another undeveloped project that has a 20-year mine life. The project is anticipated to have the capacity to produce up to 200ktpy of copper, plus additional metal by-products.

The need to accelerate these projects was highlighted by the company’s project development director, Steven Lewis, at a mining forum in Lima. The above-mentioned projects have significant amounts of copper reserves, providing much needed feedstock for the global copper supply chain. However, these projects also have significant upside for metals produced as a by-product, including molybdenum, zinc, and silver. The copper projects are at an early stage of development with no confirmed development timeline yet.

Project Blue expects molybdenum demand to grow by 2.1%py over the medium term. However, our supply forecast suggests that the market will shift to surplus by 2027-2028 owing to the commissioning of Zijin Mining’s Shapinggou primary molybdenum project in China. By the mid-2030s, molybdenum output from existing Latin American copper mines is expected to dwindle, while aging porphyry copper mines are also at risk of closing. As a result, there will be a requirement to commission additional copper-molybdenum mines.

With countries across the world aiming to reduce carbon emissions and moving towards an increasing use of greener energy, the demand for copper in electrification and molybdenum’s usage in steel (HSLA and stainless), will continue to rise. Accelerating the development of porphyry copper deposits that contain significant by-product metals, including molybdenum, will be an important enabler of the energy transition.