Question Period Note: Panama – First Quantum Minerals – Cobre Panama Mine

Cobre Panama, owned by Canadian company First Quantum Minerals (FQM), has been shuttered since November 2023. Legal, environmental, and political tensions loom over its potential reopening.

• The Government of Canada is closely monitoring this file and considers First Quantum Minerals a client of the TCS. We have engaged with the company and the Government of Panama at senior levels to encourage resolution and underscore environmental considerations.
• Aware that First Quantum Minerals and another Canadian company have filed notices of arbitration under the Canada-Panama Free-Trade Agreement regarding the closure of Cobre Panama.
• The Government of Canada is not a Party to these disputes and does not get involved in an investor’s decision to launch an investor-State dispute settlement arbitration.
• On Protests: Canada recognizes the importance of freedom of expression and peaceful assembly.
• Canada remains hopeful for a solution that will benefit all parties.

Panama's largest mine, Cobre Panama, is owned and operated by Canadian company First Quantum Minerals (FQM). Worth $15 billion, the project alone accounted for 5% of Panama's GDP, and 80% of its exports. Prior to its closure, it accounted for 1.5% of global copper supply.

Cobre Panama was ordered to suspend operations in November 2023 after its operating contract was found to be unconstitutional by Panama’s Supreme Court. This decision followed weeks of nationwide protests which paralyzed the country.

Although there are some signs of progress towards a resolution (FQM has suspended their arbitration and Government of Panama has initiated an independent audit of mine, conditionally committed to approve the export of FQM’s copper concentrate and reactivation of the mine’s power plant), recent comments by President Mulino raise alarm bells as Panama asserts that the mine – and all assets there, including the $300 million concentrate stockpile mined by FQM under contract – belong to Panama.

Many of the largest investors in First Quantum Minerals are US-based. There is therefore a strong US interest in this project.

In recent weeks, Panama has seen a surge in protests across the country. Protesters cite several issues, including concerns regarding the possible reopening of Cobre Panama. Other major issues motivating protestors are the recent social security reforms, a security-related Memorandum of Understanding signed with the United States, and a general undercurrent of concerns regarding national sovereignty versus foreign influence and control.

There are two active investor-State dispute settlement arbitration cases under the Canada-Panama FTA (CPFTA) related to the closure of the Cobre Panama mine; one from FQM and a second from Franco-Nevada, a major Canadian investor in the mine. Two other Canadian companies have filed notices of arbitration related to the Panama’s moratorium on mining which came as a result of the public backlash to Cobre Panama in 2023.

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