The giant copper mine expected to come online in Panama next year could generate more than $2 billion in revenue a year, according to government estimates.
The Cobre Panama mine, owned by a subsidiary of Canada-based company First Quantum will be one of the key drivers of Panama’s economy in the next decade. As we discussed in May, the mine, located about 120 kilometers west of Panama City near the Caribbean coast, is considered one of the largest unmined copper deposits in the world.
Mining operations currently accounts for between 1.5 percent and 2 percent of Panama’s Gross Domestic Product (GDP), but that could increase to 10 percent, Zorel Morales, president of the Mining Chamber of Panama told El Capital Financiero during the recent Expo Minera Internacional Centroamérica y el Caribe.
The mine is expected to generate between 320,000 and 350,000 tons of copper a year, he told the paper.
Although El Capital Financiero reports the mine won’t become operational until 2019, in its most recent financial statement First Quantum said: “the entire project remains scheduled for phased commissioning during 2018, with continued ramp-up over 2019.”
In its report, the company said it expects to spend $5.71 billion on the project. Several elements have already been completed, including a port and a power station
Copper prices have been rising in the last year, which makes the mine one of the most valuable sites of its kind in the world. The operation will send ripple effects through the economy, with more than 7,000 employees involved. That impact will also be felt in the property rental and sales market in Panama City, where many executives will be based, including from ancillary companies working with the miner.
First Quantum recently increased its stake in the mine to 90 percent, according to the financial statement.
“Our imminent acquisition of an additional 10 percent interest in the project reinforces our confidence not only in this project but also in the strong fundamentals for copper,” chief executive Philip Pascall said in a statement. “We are very pleased that this opportunity became available when it did and that we have been able to reach an agreement with LS-Nikko Copper on terms that match the timetable for the development and commissioning of Cobre Panama.”
Here’s a video which shows some of the scope of the project: