First Quantum Minerals Seeks $20 Billion in Compensation from Panama Over Cobre Panamá Mine Shutdown

Canadian mining company First Quantum Minerals Ltd. is seeking compensation from Panama for damages related to the shutdown of its copper mine. Panama’s closure order caused the shutdown, which left behind millions of dollars worth of copper. Consequently, large investors such as Korea Resources Corporation and First Quantum are taking action.

According to industry sources, First Quantum is demanding compensation from Panama for leaving the copper stockpile unused since the suspension at the Cobre Panamá copper mine.

First Quantum argues that the government’s mine closure has trapped 120,000 tons of copper, causing a decline in value and environmental risks. They request permission to remove the stranded copper from the mine or receive equivalent monetary compensation. The current value of this copper ore is estimated to be between $225 million and $340 million.

An anonymous tip noted, “This claim is one of two arbitration lawsuits First Quantum is pursuing against Panama regarding the closure of the Cobre Panamá mine. Initially, First Quantum expected to ship copper earlier this year, so they believe they are entitled to damages for the time they have been unable to generate revenue.”

First Quantum has launched a commercial arbitration case at the International Chamber of Commerce (ICC) International Arbitration Court (ICA) on behalf of its Cobre Panamá mine corporation. The company is demanding at least $20 billion in compensation. The final hearing is set for September 2025. Additionally, First Quantum has filed a Notice of Intent to pursue an investor-state dispute (ISD) international arbitration.

The Korea Resources Corporation is taking separate actions to resolve the incident. They hold around 10% stake in the Cobre Panamá. In February, they hired legal representatives and submitted a Notice of Intent for arbitration worth $2 billion to Panama under the Korea-China-U.S. Free Trade Agreement.

The corporation aims to restart the mine and plans to continue strategic cooperation with its major shareholder, First Quantum, for arbitration and negotiations. Specifically, they plan to set up a negotiation with the new Panamanian government after September to resume detailed discussions.

Cobre Panamá reserves 3.147 billion tons of copper and produces 350,000 tons annually, making it the largest copper mine in Panama and one of the top ten in the world. First Quantum has invested $10 billion in Cobre Panamá.

The Korea Resources Corporation entered the mining development sector by acquiring a 10% stake in Minera Panamá in 2009. After facing losses for ten years, it began producing in 2019 and reported revenues of 49.5 billion won ($3.7 million) in 2021 and 145.2 billion won ($111.7 million) in 2022. Last October, they barely recovered half of their total investment of $770.2 million, amounting to $331.6 million.

Meanwhile, Barrick Gold announced that it is pursuing the acquisition of Cobre Panamá. However, current shareholders First Quantum and the Korea Resources Corporation have not been consulted about this.