Panama's new president faces copper, canal issues

Stand-in candidate Jose Raul Mulino will take office on 1 July as president of Panama with a challenge to decide on the future of one of the biggest copper mines in the Americas.

The 64 year-old lawyer won yesterday's presidential election in the central American country, promising a "pro-investment and pro-business" policy. He won with 35pc of the vote and an about 10 percentage point lead over his next closest rival, Ricardo Lombana.

But he has delivered no comment on the future on the shuttered Canadian-owned copper facility that is one pillar of the country's economy.

His government will use public works projects and incentives for foreign investors to restore economic growth, Molino said, without giving details. Panama also faces a crippling drought that has lowered water levels and reduced transit through the economically important Panama Canal.

First Quantum intends to meet the new government to discuss reopening the mine, the company's chairman Robert Harding said in March.

"Whatever government is elected, we will work with it," Harding said. "We would like to see this mine reopen."

Panama closed the $10bn Cobre Panama mine after a supreme court ruling in November that First Quantum's contract was unconstitutional.

The mine accounted for 5pc of the country's economy and 1.5pc of global copper output, according to the government.

The shutdown will limit the country's economic growth to 2.5pc this year against 7.5pc in 2023, the IMF has forecast.

The supreme court's order to close the mine followed weeks of protests over the terms given to First Quantum in October.

Protests wracked the country as opposition parties, trade unions, environmental lobbies and non-governmental organizations objected to the terms.

"Although the mine's owners would be happy to negotiate a reopening with the new administration, this is a very hot and controversial matter for the new government," a senior official of the outgoing government of President Laurentino Cortizo told Argus today. "Any suggestion of negotiating a reopening would again bring people on the streets."

Mulino ran with former president Ricardo Martinelli until the courts disqualified Martinelli because of a money laundering conviction.

Martinelli had proposed that Panama renegotiate the contract with First Quantum to secure higher royalties and a stake.

"Mulino is a mentee of Martinelli, but I doubt he would stoke public anger by seeking to reopen the mine," the official said.

Cobre Panama produced 331,000 t in 2023, 5pc less than 2022 output, First Quantum said.

By Canute James