The Panamanian government has authorized the export of stockpiled copper concentrate from First Quantum Minerals' (TSX:FM,OTC Pink:FQVLF) Cobre Panama mine, which was shut down in late 2023.

Last week, President Jose Raul Mulino approved the removal of approximately 120,000 metric tons of copper concentrate that has been stranded at the site since the mine was shuttered.

Market watchers believe the move could indicate openness to future negotiations about the mine's fate, with First Quantum shares closing at C$21.03 on March 14, up close to 25 percent over the course of the week.

The decision comes as Panama grapples with economic repercussions from the mine’s closure.

The C$10 billion Cobre Panama mine accounted for roughly 5 percent of the country’s GDP before operations were halted. According to the National Council of Private Companies, around 54,000 jobs have been lost due to the shutdown.

Mulino has also ordered the restart of a 300 megawatt thermal power plant at the Punta Rincon port, located about 27 kilometers north of the mine. The plant’s reactivation is necessary for the shipment of copper concentrate.

However, Panama's Ministry of Trade and Industry clarified that the government is still evaluating how the plant can be brought back online in a way that benefits Panama’s national power grid.

“This decision does not mean a reactivation in mining activity,” Reuters quotes the ministry as saying.

First Quantum welcomed the announcement, stating that proceeds from the exported copper will support essential maintenance and preservation activities at the mine site.

Even so, the company still faces significant legal hurdles. The Panamanian government has maintained that it will not engage in direct negotiations with the miner unless it withdraws arbitration proceedings against the country.

“Any sort of approach will depend on the immediate suspension of those processes,” the ministry stated. “Once that is done, we can move forward with the authorization ... on the shipment of the stored copper concentrate.”

First Quantum has not yet commented on whether it plans to drop its arbitration case.

The company filed the claim after Panama revoked its mining contract, a move prompted by a Supreme Court ruling that declared the contract unconstitutional. Cobre Panama's closure in November 2023 also came after widespread protests over environmental concerns and accusations that First Quantum had received overly favorable tax terms.

The company is currently engaged in multiple legal disputes over the mine. A key arbitration hearing under the International Chamber of Commerce, initially scheduled for September 2025, has been postponed to February 2026.

The impact of Cobre Panama’s closure has been felt throughout the country’s economy. Mulino acknowledged the economic strain during a weekly press conference, noting the mine’s significance to Panama’s revenue streams.

“It’s dramatic, what is happening,” Mulino said. “We are feeling it, in unemployment, lack of revenue for the state, and in many other things like paying providers that haven’t been paid everything they are owed.”

Mulino has yet to meet with First Quantum executives, and the administration’s stance on future mining operations remains unclear. His remarks on the consequences of the closure suggest a negotiated reopening could be on the table.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.