Three ministers handed President José Raúl Mulino a 35-page report on 30 September 2026, putting a price on Panama's largest mining dilemma: at least US$27 billion in arbitration claims, and a closure bill of up to US$3.4 billion if the state does nothing. The Cobre Panamá commission recommends talks with First Quantum Minerals on a limited restart. The mine would operate only to generate funds for its own orderly shutdown.
"The site pays for its own closure, or there is no deal," said Economy and Finance Minister Felipe Chapman.
The Ministry of Commerce and Industry (MICI) published the full report online. It makes 17 recommendations and sets six criteria. The footprint can't expand; it must shrink in stages. Any agreement needs a fixed final-closure date, with dated milestones for each part of the site. Officials must identify, cost and pay for irreversible damage.
The Legal Exposure
After the Supreme Court's November 2023 ruling, First Quantum and the project's financial partners began international arbitration cases. At their minimum amounts, the claims total at least US$27 billion, about 30% of Panama's GDP, according to a calculation by En Segundos. Panama hasn't accepted the claims as a debt and says it will defend itself.
The report's 17th recommendation makes ending every case a mandatory condition of any agreement. First Quantum announced on 31 March 2025 that it had withdrawn one International Chamber of Commerce case and suspended another under the Canada-Panama free trade agreement. No tribunal has ruled on the merits.
The commission draws a firm line on legal form, too. Any deal can't be a concession or a contract-law arrangement, which the report describes as the type of contract the Supreme Court struck down. Law 407 of 2023 bars new mining concessions. A published legal opinion would have to show that the arrangement avoids the flaws the court identified.
What Closure Costs
The report describes closure as decades of engineering work. The tailings dam, which stores mining waste, has 164 instruments under constant monitoring. In March 2024, MICI estimated closure would cost US$800 million to US$1 billion over seven to nine years. Upkeep afterward, at US$15 million to US$20 million a month, would add US$1.8 billion to US$2.4 billion.
Without a deal, the commission puts total costs at US$2.6 billion to US$3.4 billion over 17 to 19 years. That's as much as 9.7% of Panama's 2026 state budget. The balboa trades at par with the U.S. dollar, leaving the state with no currency of its own to fall back on.
Idling the mine carries its own daily bill. Each day without a decision, the commission says, costs Panama an average of US$6.85 million in export earnings and about US$1.28 million in tax revenue. The report says the 2023 shutdown cost more than 6,000 direct jobs and about 30,000 indirect jobs.
The current phase processes ore extracted before the shutdown and has created 2,300 direct jobs. The site funds it, not taxpayers. Exports of 121,000 tonnes of stored copper concentrate earned the state US$30 million in royalties.
Government and Company Response
First Quantum said it would engage "constructively and in good faith" toward a legal framework aligned with Panama's constitution. It awaits government guidance. Mulino accepted the six criteria as non-negotiable. He said he'd study the remaining material with his cabinet and lawyers before announcing a decision, and he hasn't given a date.
The report sets no date for future activity at the site and approves no contract or payment. A portion of state income from the site would go automatically to an environmental fund run by the Environment Ministry. The commission calls, too, for an immediate programme of water, sanitation, health and electricity for nearby communities in Donoso, the district in Colón province where the mine sits. Weeks of street protests preceded the 2023 ruling that ended the previous contract.
Why This Matters:
The report puts hard numbers on a choice Panama can't postpone indefinitely. Closure without a deal could cost up to 9.7% of a year's state budget, while claims of at least US$27 billion hang over a country that uses the U.S. dollar. Each idle day forfeits export and tax revenue.
The commission's conditions offer the main safeguard from a fiscal and institutional view: a self-funding closure, no concession, a published legal opinion and an end to every arbitration case. Mulino now has to decide whether talks can meet those terms. Investors in other jurisdictions will be watching how Panama handles the contract question and arbitration exposure, since both bear on how the country is judged as a place to do business.