Reviving Cobre Panamá could be strategic to US minerals security - CSIS

First Quantum's Cobre Panamá mine – which has been suspended since November 2023 – could be strategic to US mineral security, the Center for Strategic and International Studies (CSIS) concluded in a report.

The nonprofit policy research think tank stated that copper continues to be a critical component of the global economy. 

Demand for the red metal is projected to increase by 70% – surpassing 50Mt in 2050 – due to its essential role in industries such as artificial intelligence, clean energy technologies, transmission networks, datacenters and defense, according to the research center.

However, CSIS warned that meeting this rising demand presents a major challenge, as between one-third and one-half of the global copper supply is expected to be impacted by declining ore grades and aging infrastructure, leading to higher production costs and greater capital reinvestment needs.

"In this context, the shutdown of a major copper mine – ranked tenth globally in output and operational for less than five years – represented a significant disruption to global supply," the center said.

The largest open-pit copper mine in Central America, Cobre Panamá produced 330,863t of the metal in 2023 before halting operations, accounting for roughly 1.5% of global supply. 

CSIS highlighted that, at a time when many long-established mines are in decline, Cobre Panamá stands out as one of the few newly developed, large-scale operations to have reached production in the last 15 years.

According to the think tank, diversifying copper supply sources is essential to safeguarding US national security interests. 

CSIS noted that executive order 14220, signed by President Donald Trump, states: "A single foreign producer [China] dominates global copper smelting and refining, controlling over 50% of global smelting capacity and holding four of the top five largest refining facilities… This heavy dependence poses a strategic vulnerability, especially amid rising geopolitical tensions."

To meet long-term demand, CSIS proposes that the United States must broaden its network beyond its traditional copper trade partners. "Currently, the vast majority of refined copper imports come from four free trade agreement nations: Chile, Canada, Peru, and Mexico. While these relationships remain important, copper output in these countries is forecasted to grow by only 6% through 2035 – insufficient to meet future needs."

According to the center, the United States must enhance its capabilities across the copper supply chain – including mining, smelting and manufacturing. "To develop a supply chain that's independent of China, the United States must secure greater access to copper ore, both within its borders and from partner countries."

Cobre Panamá represents a potential long-term source of copper, and CSIS identified three reasons why Panama has strategic value as a potential supplier of copper concentrate to the United States.

"First, Panama has excellent geological resources. Cobre Panamá is among the world's largest copper mines and is one of the few significant copper projects developed globally in the past 15 years. It has the capacity to supply copper to the United States until at least 2055," the report said.

Second, its geographic location offers a logistical advantage. Of the 10 largest copper operations in the world, CSIS recalled that only three are located in North or Central America: Morenci in Arizona (in production since 1872), Buenavista in Mexico (operational since the 1940s) and Cobre Panamá, which began production in 2019. "This proximity makes it more commercially viable to process copper in the United States, provided domestic midstream infrastructure is expanded."

And third, the United States and Panama have strong bilateral economic ties, anchored by the US-Panama Trade Promotion Agreement that went into effect in 2012. In 2024, US-Panama trade reached US$11.3bn in goods, with the United States posting a US$10.1bn trade surplus, underscoring the strength of this economic relationship, according to the think tank. 

Panama's supreme court declared the renewed concession contract with First Quantum subsidiary Minera Panamá unconstitutional, resulting in the closure of the US$6.5bn copper mine at the end of 2023, during the administration of Laurentino Cortizo.