12 June 2026
The future of Panama’s mining sector lies in the hands of a three-minister inter-institutional team. With a decision due on the Cobre Panamá mine this month, President José Raúl Mulino’s attempts to reactivate the economy faces its biggest test.
At full capacity, Cobre Panamá represented about 5% of the country’s GDP and 75% of its exports. It contributed US$2.5bn annually to GDP, created over 40,000 direct and indirect jobs and generated hundreds of millions for government revenue through taxes and royalties. A failure to reopen the mine would imperil Panama’s investment grade rating.
“From the first day of my administration, I have been clear. The issue of the mine would be addressed in due course, and it would be done with clear, objective information, using data from international experts in a comprehensive audit,” said Mulino in a public statement.
The group responsible for the technical report on the Cobre Panamá will be headed by Julio Moltó, Minister of Commerce and Industry. Also included will be Felipe Chapman, Minister of Economy and Finance and the Minister of Environment Juan Carlos Navarro. Navarro is an interesting choice given he has a public anti-mine stance. The technical report will be the basis for future decisions on the mine. It will include economic, environmental and legal perspectives.
Work at the mine was suspended in 2023 after the Supreme Court ruled that the contract First Quantum had signed with the government was unconstitutional. The company estimates that Panama has lost US$3.5bn in economic contributions through 2025 including US$1.1bn in taxes and royalties.
“We are proud to play a central role in driving economic growth and national development through tax contributions, local investment, and employment,” said First Quantum in a statement. “First Quantum remains a growth company – we will deliver this growth through true partnerships, underpinned by our commitment to responsible mining and contributing to the prosperity of the regions where we operate.”
The suspension followed months of social unrest across the country. Protests began in October 2023 following the passing of the contract with First Quantum Minerals which gave the company a 20-40 year concession for Cobre Panamá. The mine is the largest open-pit copper mine in Central America. In May, protests in Panama City regarding the mine’s future attracted hundreds of people rather than the numbers in 2023.
Cobre Panamá’s influence on the Panamanian economy is so strong that Moody’s recent review of the economy kept it at Baa3, the lowest investment grade and with a negative outlook. This was due to public debt, tax revenues and state finance consolidation. The rating agency said reactivating the mine would generate recurring revenue for the state and improve public finances and strengthen investor confidence in the country. This would alleviate fiscal pressure as deficit reduction, government revenue, greater fiscal transparency and reforms to ensure sustainability are still required. Fitch has already moved Panama to BB+ and into speculative territory.
Mulino promised in January to give a decision on Cobre Panamá by June but the president promised that he will not be hurried into making it. Citing the protests, Mulino said, “I have learned what improvisation caused, what the lack of clear information generated in society.”
Instead, Mulino promised to let the inter-institutional team work and use their technical report to help make his decision. The report will not have the final independent audit from SGS Panama Control Services after the company requested an extension on its delivery.
“Just as we did with the ports, we will work responsibly, listening to those who know, understand, and have experience in the matter, in order to make the best decisions for the country and its people,” added Mulino.
Photo Credit https://cobrepanama.com/nota/cobre-panama-makes-history-by-opening-its-doors-to-the-public-5112
Source: Central America Briefing | Vol 14, Issue 12