First Quantum's shuttered mine passes audit, as Panama weighs restart

The independent audit, released by Panama's environment ministry, gave the mine an overall score of 88%, making it broadly compliant, though short of the top "optimized" rating.

The findings mark an important step for the future of Cobre Panama, a massive mine that was shut in late 2023 after nationwide protests over its environmental impact and the economic benefits flowing to the state.

Still, the audit flagged weaknesses in reforestation, habitat restoration and biodiversity protection, and identified future liabilities linked to the tailings facility, water quality, acid drainage, erosion, biodiversity loss and the effectiveness of restoration efforts.

"The decision [on the future of the mine] will be based on data, evidence and technical rigor," Trade Minister Julio Molto told reporters on Friday.

Cobre Panama called the audit an important step, adding it was confident the report would allow the government to make a "responsible, transparent and informed" decision on the mine.

For investors, the audit could strengthen the case for a negotiated restart rather than a permanent closure.

Scotiabank called the results positive in a note to clients, saying they were likely to support a recommendation from Panama's president to fully restart the mine with First Quantum remaining the operator, albeit under renegotiated fiscal terms.

The bank assumes First Quantum will be required to pay a higher tax and royalty burden, with a possible 5% direct ownership stake for Panama.

Cobre Panama was one of the country's biggest economic engines before its closure, accounting for roughly 5% of GDP, and its shutdown removed a significant source of copper supply from the global market.