First Quantum Minerals has initiated steps to suspend its arbitration proceedings against the Panamanian government, signaling a potential thaw in the contentious dispute surrounding the shuttered Cobre Panama copper mine. This move follows recent announcements by Panama's President, Jose Raul Mulino, indicating a willingness to allow the export of stockpiled copper concentrate and the reactivation of the mine's power plant.

According to an internal memo released by Manuel Aizpurua, manager of Cobre Panama, First Quantum has instructed its legal team to engage with the Panamanian government's lawyers to facilitate the suspension of arbitration. This decision comes in response to the Panamanian Ministry of Commerce's explicit condition that any future negotiations would only proceed if the arbitration case were dropped.

"We have instructed our lawyers to meet with the government’s legal team to work on suspending the arbitrations. leading to a solution that benefits workers, communities, suppliers and all Panamanians," Aizpurua stated in the memo.

This has the potential for the Cobre Panama mine to resume operations. It would allow First Quantum to regain a significant source of revenue and copper production and for the company to begin to recoup the large investments that were put into the mine.

The Cobre Panama mine, a significant contributor to global copper supply, accounting for approximately 1% of world output, was ordered to cease operations in late 2023 by the previous Panamanian administration due to widespread environmental protests. This shutdown resulted in the accumulation of approximately 120,000 metric tons of copper concentrate within the mine's premises, raising concerns about potential environmental degradation and economic losses.

President Mulino's recent decision to authorize the export of this stranded copper concentrate and the reactivation of the mine's power plant marks a significant shift in the government's stance. He argued that the copper concentrate was being wasted and that Panama would seek reimbursement once the material was processed outside the country. Moreover, Mulino pledged to undertake a comprehensive review of the mine's future, emphasizing the need to prioritize national interests.

"The issue of the mine will be approached with great responsibility and taking into account at all times the national interest," Mulino stated during a press conference. "We’ll start as of next week."

The market has reacted positively to these developments. First Quantum's shares experienced a notable surge on the Toronto Stock Exchange, reaching a two-month high on Thursday following the initial announcement of the export authorization. On Friday afternoon, the stock continued its upward trend, rising by 1%.