The fate of Panama's massive Cobre Panama copper mine, a $10 billion investment idled since late 2023, hangs in the balance as President Jose Raul Mulino signals a potential reopening, albeit one fraught with significant political, legal, and social challenges.

President Mulino's recent aerial inspection of the dormant mine, coupled with his public commitment to exploring "novel ideas" for its revival, has injected a dose of optimism into the situation. However, the path to restarting the operation, which once contributed approximately 5% to Panama's economy, remains arduous.

The mine's closure was triggered by widespread environmental protests and a Supreme Court ruling deeming its operating contract unconstitutional. Thousands of jobs have been lost, businesses dependent on the mine have suffered, and the nation's coffers have been significantly impacted.

First Quantum Minerals Ltd., the mine's owner, has intensified its outreach efforts, highlighting the economic devastation caused by the shutdown. The company's efforts appear to be gaining traction, as evidenced by President Mulino's recent comments and the growing recognition of the mine's importance to local communities.

Locals have exemplified the economic hardship faced by many. The closure of mine has forced the closure of a school that relied on the mine's financial support.

President Mulino acknowledges the complexity of the situation, stating, "At a government institution level, we are discussing what we are going to do with the mine. It’s a very, very complex topic." He has also emphasized that he will not engage in negotiations with First Quantum until the company withdraws its arbitration proceedings against Panama.

The mine's unpopularity among segments of the population, stemming from environmental concerns and perceived unfair contract terms, remains a significant hurdle. The powerful construction workers' union, which spearheaded the 2023 protests, continues to oppose the mine's reopening. Saul Mendez, the union's leader, declared, "Opening Cobre Panama is unacceptable," vowing to continue the fight.

Beyond public opposition, several practical and legal obstacles must be overcome. The moratorium on open-pit mining, imposed by the previous administration, needs to be lifted, a move that requires legislative support in the opposition-controlled National Assembly. Furthermore, any reopening must address the environmental concerns that fueled the initial protests, potentially involving a lengthy consultation process and increased state ownership.

The global copper market is also watching closely. The closure of Cobre Panama, which accounted for approximately 1.5% of global copper supply, has exacerbated supply constraints amidst rising demand. The mine's restart would provide much-needed relief to the market.