Panama considers state mining company to revive Cobre Panama copper project

Wednesday 22 July 2026 - 16:45

By: Sahili Aya

Panama considers state mining company to revive Cobre Panama copper project

Panama is exploring the creation of a state-owned mining company as part of a new strategy to restart operations at the Cobre Panama copper mine, a project that has remained idle since a landmark court ruling halted production in 2023.

According to sources familiar with the discussions, the proposed structure would allow the Panamanian government to participate directly in the ownership and management of one of the world's largest copper mines while reopening negotiations with Canadian mining company First Quantum Minerals.

New partnership model under consideration

Officials are evaluating several options to bring the project back into operation. One proposal would establish a state-controlled mining company that could partner with First Quantum, with the Canadian group potentially retaining a 60% to 65% ownership stake in the operation.

Another scenario under review would involve a leasing arrangement under which First Quantum would continue operating the mine while paying royalties and taxes to the Panamanian government.

Both approaches are aimed at creating a new legal and commercial framework following the cancellation of the previous mining contract.

Copper market strengthens economic case

The discussions come as global copper prices remain close to historic highs, improving the economic attractiveness of restarting the project. Demand for copper continues to grow as industries expand investment in renewable energy systems, electric vehicles and power infrastructure, all of which require significant quantities of the metal.

Reviving Cobre Panama could therefore generate substantial export revenues, employment opportunities and fiscal income for the country.

Legacy of legal and public opposition

Operations at Cobre Panama were suspended after Panama's Supreme Court ruled that the long-standing mining contract with First Quantum was unconstitutional. The decision followed months of nationwide demonstrations driven by environmental concerns, governance issues and broader public opposition to the agreement.

Despite renewed negotiations, government officials remain aware that any proposal to reopen the mine could face renewed public resistance, according to people familiar with the discussions.

Balancing investment and public confidence

The government's deliberations reflect the challenge of reconciling economic priorities with environmental accountability and public trust. Any future agreement is expected to require stronger governance mechanisms, greater transparency and a revised legal framework capable of addressing the concerns that led to the mine's closure.

As negotiations continue, the future of Cobre Panama is likely to remain one of the country's most significant economic and political issues, with implications extending across the global copper industry.