The long-awaited arbitration proceedings between Franco-Nevada and the Republic of Panama regarding the contentious closure of the Cobre Panama copper mine are now slated for a hearing in October 2026. This development, revealed after a tribunal was formed in December, brings a degree of clarity to a situation that has significantly impacted both the streaming company and the Panamanian economy.

Franco-Nevada, holding a gold-copper streaming agreement with First Quantum Minerals, the mine’s operator, suffered a substantial blow when the $10 billion Cobre Panama mine was shuttered in 2023. The closure, triggered by widespread protests and subsequent government action, forced Franco-Nevada to record a $1 billion impairment charge, highlighting the financial repercussions of the mine's shutdown.

Despite the ongoing legal battle, Franco-Nevada's leadership remains cautiously optimistic. "We are encouraged that President Mulino has indicated a willingness to discuss Cobre Panama this year and that sentiment in Panama now appears more supportive of restarting the mine," stated CEO Paul Brink during the company's 2024 full-year results presentation.

The context of this arbitration is deeply intertwined with First Quantum's own legal dispute with Panama. The mining giant, which saw Cobre Panama contribute approximately 40% of its revenue, has filed a separate $20 billion damages claim against the Panamanian government. The final hearing for First Quantum’s case has also been postponed to 2026, creating potential space for negotiated settlements.

President José Raúl Mulino's stance on the mine has evolved, signaling a potential shift in Panama's approach. During a visit to the mine site in February, Mulino acknowledged its critical economic importance, given that it contributed nearly 5% of Panama's GDP. He expressed a willingness to explore "novel ideas" for the mine's future. However, Mulino has maintained that he will not engage in direct negotiations with First Quantum unless the company withdraws its arbitration claim, creating a significant point of contention.

The reopening of Cobre Panama faces considerable obstacles. Mulino's immediate priority is the passage of controversial social security reforms, which are currently in the final stages of congressional review. Only after these reforms are addressed will the government fully focus on the Cobre Panama issue.

Moreover, lifting the open-pit mining moratorium imposed by the previous administration requires legislative support, a challenge given the opposition-controlled National Assembly. Securing the necessary political consensus will be crucial for any potential restart.

The simultaneous arbitration proceedings and the evolving political landscape create a complex scenario for all stakeholders.