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A hearing to determine the fate of First Quantum’s Cobre Panama mine has been pushed back six months to February 2026, weighing on hopes that regular supplies of the operation’s concentrates would resume sooner.
To be sure, this doesn’t mean an agreement won’t be found for regular exports to resume sooner, avoiding International Chamber of Commerce hearings entirely.
Arbitration is a last resort for First Quantum, which has said it is hoping to be permitted to export the concentrates and reopen the mine after the country’s government approves its Preservation & Safe Management (P&SM) program and completes an environmental audit.
But it does mean that there are still more steps to be satisfied before this can be achieved, and that arbitration hearings — not scheduled to start for a year – remain on the table.
The 350,000-tonnes-per-year Cobre Panama mine was shuttered more than two years ago due to a ruling by the Supreme Court of Panama, triggering a slide in TCs/RCs in a market that was already showing signs of tightness.
Around 121,000 tonnes of copper concentrate are sitting in storage at the mine, awaiting government approval for export, First Quantum has said.
The tightness in the concentrate market has been reflected in TCs/RCs, which are at all-time lows.
Fastmarkets calculated the copper concentrates TC index, cif Asia Pacific and the copper concentrates RC index, cif Asia Pacific at $(12.50) per tonne and (1.25) cents per lb, respectively, on February 7, down from $(10.30) per tonne and (1.03) cents per lb on January 31.
This effectively means that copper smelters could be paying a premium to miners to turn semi-processed ore, or concentrate, into finished metal, instead of the other way around.
That’s especially the case in China, where the tightness in concentrates has hit smelters particularly hard.
Earlier this week, China issued a plan which included an edict that copper smelting projects need to have an appropriate proportion of raw material supplies secured before being built.
Industry observers say the new ruling will likely limit the addition of new smelters in the country, which has seen an explosion of smelting capacity over the past decade.
Some additional units are nonetheless expected to hit the market in the near future, however.
Freeport-McMoRan said its Indonesian unit, PT-FI, plans to resume exports of copper concentrates in the first quarter of 2025, subject to a 7.5% export duty.
Mine production is not stagnating either. According to Fastmarkets analyst Andrew Cole, total world copper mine production grew by 1.4% in the fourth quarter of 2024, with SX-EW output (-1.2%) offset by concentrate output (+1.8%).
The growth did not prevent the all-time lows in TCs/RCs, however, he noted.
In Hotter Commodities, special correspondent Andrea Hotter covers some of the biggest stories impacting the natural resources sector. Read more coverage on our dedicated Hotter Commodities page here.