Arbitration proceedings are advancing between Franco-Nevada and Panama regarding the Cobre Panama copper mine, with a tribunal scheduling hearings for October 2026.
The economic significance of the mine, which previously contributed 5% to Panama’s GDP, has prompted renewed discussions as both Franco-Nevada and First Quantum navigate legal claims against the government amid shifting sentiments from President José Raúl Mulino.
Despite the mine’s closure resulting in a $1 billion impairment charge for Franco-Nevada, investor optimism has surged, driving its stock to a new 52-week high. This optimism stems in part from Mulino’s openness to reviving the mine, suggesting that negotiations may finally progress after years of legal and political challenges.
Challenges remain significant, including lifting the open-pit mining moratorium and addressing social security reforms. The complexities of the situation illustrate the intricate balance between economic needs and regulatory hurdles that both companies must navigate in their pursuit to restart operations.
This case centers around the reopening of the Cobre Panama copper mine, which has significant economic implications.
Franco-Nevada, a royalty and streaming company, had a partnership with First Quantum, the mine’s operator. The closure in 2023 resulted in a substantial $1 billion impairment charge for Franco-Nevada.
Key Details:
Hearing Date: October 2026
Claim Amount: Franco-Nevada’s agreement involves a $10 billion stake regarding the mine.
Mine Contribution: Cobre Panama previously generated 5% of Panama’s GDP.
First Quantum has also initiated its own legal claim against Panama, seeking at least $20 billion in damages. This case’s final hearing has been postponed to accommodate ongoing negotiations between First Quantum and the Panamanian government.
The closure of the Cobre Panama mine has led to significant financial ramifications for Franco-Nevada and has greatly affected Panama’s economy. The repercussions are felt across both the mining sector and the national sector.
This charge reflects not only the immediate loss of revenue but also potential long-term effects on Franco-Nevada’s market position. Despite recent optimism, the uncertainty surrounding the mine’s reopening may lead to continued volatility in Franco-Nevada’s stock performance.
The recent spike in its stock price, reaching a 52-week high of C$212 per share, indicates some investor confidence. However, the lingering arbitration proceedings and First Quantum’s separate legal claims add layers of complexity that could affect future financial outcomes.
