The battle over the Cobre Panamá mine in Colón Province, one of the world’s largest open-pit copper mines, remains as charged as ever. Once a symbol of Panama’s economic promise, the site has become a flashpoint in the country’s struggle to balance growth, legality and public sentiment. The recent government authorisation allowing First Quantum Minerals to export 120,000 tonnes of previously produced copper concentrate marks the first real sign of movement since the mine’s forced shutdown in 2023. 

For context, Cobre Panamá once produced around 300,000 tonnes of copper annually, accounting for roughly 5 percent of Panama’s GDP and 75 percent of total goods exports. Its closure, following a Supreme Court ruling that declared the mining contract unconstitutional, brought a sector vital to the national economy to a standstill. The two-year suspension has cost the Panamanian economy approximately USD 1.7 billion, according to First Quantum. 

The Supreme Court’s decision underscored the rule of law in Panama, but it also triggered deep economic ripples. Panama’s growth rate, which stood at 7.4 percent in 2023, slowed sharply to 2.9 percent in 2024. The IMF forecast a partial rebound to 4.5 percent in 2025, but the road to recovery will depend heavily on restoring investor confidence and clarifying the future of Cobre Panamá. 

Behind the scenes, cautious negotiations continue. As a mining legal advisor explained, “There have been discussions since the new government took office in July last year, and there has been progress. However, it is a very complex issue because it involves a ruling by the Supreme Court of Justice, whose decisions are final.” The advisor emphasised that “both the government and the company must tread very carefully to find a solution through an agreement that does not violate Panamanian law and that would not be subject to further legal challenges.” 

The new administration, which includes several pro-business officials, has shown an openness to reviving mining operations. “The current government is made up of officials from the business sector who are supportive of mining activity,” noted the legal advisor. “They are advocating for operations to resume and for the remaining obstacles to be overcome.” 

“The current government is made up of officials from the business sector who are supportive of mining activity.”

Legal advisor, Panama

Still, the government must balance these efforts against lingering public opposition, “although I feel this is gradually diminishing over time due to the economic impact and unemployment affecting the country,” remarked the lawyer. Indeed, the prolonged closure has strained employment in the Colón region and dampened domestic demand. 

Encouragingly, recent government actions suggest a thaw in the standoff. The Minister of Commerce recently told the National Assembly that First Quantum had withdrawn one of its international arbitration cases and suspended the remaining three. An executive of the Panamanian Chamber of Mining described this as “a very positive” step. The move is widely seen as a gesture of goodwill, an attempt to re-establish trust with the Panamanian state and pave the way for a lawful reopening. 

Both sides appear to recognise the stakes. “Several alternatives are being considered,” a source observed, “But what is certain is that their objective is to continue operations.” Likewise, the mining executive confirmed that “the company and its shareholders have shown confidence in the country, and their objective, as they have made known to us, is to continue operations and even expand them.” 

The mine’s revival would represent more than a resumption of copper export; it would be a statement about Panama’s capacity to reconcile governance with investment stability. “What happened with the mining project has undoubtedly caused surprise and concern among international investors,” the lawyer warned. “Efforts must be made to find a solution that can dispel doubts and fears.” 

“What happened with the mining project has undoubtedly caused surprise and concern among international investors...efforts must be made to find a solution that can dispel doubts and fears.”

Legal advisor, Panama

The uncertainty surrounding Cobre Panamá has already contributed to Panama’s loss of its investment-grade credit rating in March 2024, adding urgency to the need for a credible resolution. Still, confidence in the country’s fundamentals remains resilient. As the Panamanian Chamber of Mining executive pointed out, “Panama, due to its geographic location, is an attractive destination for investment. And while it’s true that this situation has caused some uncertainty, it does not mean that interest in investing in the country will decline.” However, “there are other political factors at play, for example, pressure from the United States government on Panamanian business people and officials due to the growing presence of companies from the People's Republic of China in Panama.” 

For investors watching from abroad, the Cobre Panamá saga highlights how the intersection of politics, law and natural resources can shape the trajectory of an entire economy. The coming months will test Panama’s ability to deliver legal clarity and policy stability - conditions that, if achieved, could restore its place as one of Latin America’s most attractive investment destinations. 

The mining legal advisor aptly concluded, “The mining sector is very attractive to many investors, and there will always be interest in participating or even acquiring the business. However, before anything else, an agreement must be reached that leaves no room for doubt and guarantees legal certainty for the investment.”