Copper miner's $10B bet comes to life in Panama jungle
The world’s largest new copper mine rumbled to a start this week in the Panamanian jungle, poised to supply a global market that’s tipping into deficit and gives First Quantum Minerals Ltd. a chance to prove its $10 billion investment was worth all the trouble.
Cobre Panama, a vast mining and processing complex near Panama’s Atlantic coast, processed its first ore on Monday, a half century after the deposit was discovered. At full production in 2021, it will turn Vancouver-based First Quantum into a top copper producer alongside giants like Freeport-McMoRan Inc. and BHP Group.
For Panama, it’s the biggest investment ever outside the canal and makes the Central American country a key supplier to a copper market facing labor unrest and governments grasping for greater takes. The $6.3 billion project will be able to ship its concentrate, thanks to the Panama Canal, to just about any smelter in the world.
“This establishes a new jurisdiction for mining,” Tristan Pascall, the project’s general manager, said in an interview at the facility shortly before the first ore passed through its mills. “There aren’t many projects coming on.”
Past failures
It’s been a long time coming. For 50 years the deposit had remained tantalizingly but steadfastly out of reach.
“Possibly vast beds could rival Panama Canal as economic asset to country,” the Star & Herald, a local English-language newspaper, trumpeted on the front page of its May 1, 1968 edition after a United Nations survey team discovered the deposit.
Past attempts to develop it all met with failure. The terrain undulates like an egg carton — impossible to navigate for colossal mining equipment. When it rains, as it often does, the soil turns into a maddening toothpaste-like clay. A Japanese consortium of seven companies and Teck Resources Ltd. abandoned it. In 2013, First Quantum took it on after a C$5 billion ($3.8 billion) takeover of Canadian rival Inmet Mining Corp., which had spent two decades on the project with little to show for it. Most in the mining industry had written off Cobre Panama.
‘Too-hard box’
“It was a project that all the major mining companies had put in the too-hard box,” says Clive Newall, co-founder and president of First Quantum.
It seems they were wrong.
In the six years since, the Canadian miner has managed to level the daunting terrain, at times filling in trenches 60 meters deep. It built a deep-water port where mining trucks the size of a suburban house can roll in fully assembled off ships. It built a coal-fired power plant and Panama’s third road connecting the Atlantic and Pacific Oceans.
Kjell Anzelius, 85, the only surviving member of the original U.N. survey team, began seeing stories about the mine in the news last year. When he realized that the deposit he’d helped discover was on the cusp of production, he hopped on a plane from his home in Sweden.
source: MINING.COM
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