Audit on Cobre Panama Copper Mine Shows 87.73% Compliance

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

The Panamanian government published the SGS audit on the shuttered Cobre Panama mine, which showed an 87.73% compliance rate. Technical operations performed best, while risk and environmental liabilities were weakest. The audit does not mean the mine will reopen, but officials said the report will inform the debate and government's decision making.

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Audit Results

The Panamanian Ministry of Environment published the results of the audit conducted by SGS Panama Control Services Incorporated (SGS), which gave the asset an overall compliance score of 87.73% across segments of its operations. Technical and operational standards ranked highest in compliance, at 90.20%, while risk and potential environmental liabilities ranked lowest, at 81.70%.

The report does not order or recommend the reopening of the mine, but serves as technical input for the government of José Raúl Mulino as it assesses the mine's future. The mine was shut in late 2023.

"This report doesn't close the conversation; it structures it. Therefore, I ask every Panamanian to read the report, or at least its conclusions, before forming a definitive opinion. Panama deserves an informed debate, not a debate of slogans," said Julio Molto, Minister of Commerce and Industries.

The SGS report covered the period from 2019 to 2023 and analyzed 370 environmental commitments. Of these, 361 were compliant, and nine were nonconforming, including soil disturbance, reintroduction of species and long-term aquatic life monitoring.

The lowest-ranked environmental commitments pertained to reforestation processes inside and outside the mine's area.

The audit also made several recommendations in environmental and technical areas, including environmental control, water management, critical infrastructure monitoring, and technical information traceability, among others.

"We trust that this report will contribute to a more informed and evidence-based conversation about the next steps that will allow the country to responsibly, transparently and knowledgeably assess the future of the project, considering its impact on employment, environmental management, social investment and economic development in Panama," said Cobre Panama, First Quantum's local unit, in a statement.

The Cobre Panama Mine

The Cobre Panama mine has been at the centre of controversy since November 2023, when Panama's Supreme Court declared the contract law unconstitutional, and operations were suspended. Panamanians also took to the streets to protest mining activities at the site.

In recent weeks, groups have reignited protests against the potential reopening of the mine, while Mulino's government has yet to make a final call on the asset's fate.

In April, the Panamanian government approved the processing of 38 million tonnes of ore stockpiled at the asset, around 70,000 tonnes of recoverable copper. The processing program covers the removal, processing and export of stockpiled ore extracted before the suspension of operations, and First Quantum estimated the required capital for the project at around US$250 million.

Cobre Panama was one of the world's largest copper mines, producing 350,000 tonnes of copper in 2022, the year before it shut down.

Key Takeaways

• Audit on Cobre Panama shows compliance of 87.73%.
• The results do not indicate that the asset will reopen.
• The audit is expected to inform the government's decision on the fate of the asset.

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