By Elida Moreno
PANAMA CITY, April 7 (Reuters) - Panama's government formally approved on Tuesday for Canada's First Quantum Minerals to remove, process and export stockpiled ore at its shuttered Cobre Panama mine, one of the world's largest open-pit copper deposits.
The ministry and First Quantum said in separate statements that the measure aimed to prevent potential environmental issues, protect nearby communities from risks such as acid rock drainage, and supply the tailings management facility.
"This activity does not constitute a reopening of the mine and will not involve any new drilling, blasting, or reactivation of mining operation," First Quantum said in a statement.
The ministry added the measure was a preventive safety action and did not signify a formal reactivation of the mine's standard operations.
It authorized the miner's local subsidiary to process and transport the stockpiles under strict state supervision.
First Quantum estimated there are some 38 million metric tons of mineralized ore at varying grades in its stockpile, containing around 70,000 tons of recoverable copper.
The miner said the required capital for processing the stockpile was estimated at around $250 million, mainly to replenish inventories, and that Cobre Panama had begun hiring and training about 1,000 new workers to expand its current workforce to 3,000.
It estimated it could take up to three months before it is able to begin processing the stockpile.
Despite the miner and government saying the measure does not mean the mine will reopen, analysts at Goldman Sachs said they viewed the decision and an upcoming independent environmental audit, due in mid-April, as potential steps toward a broader discussion regarding the future of the mine.
The Cobre Panama mine was shuttered in 2023 following widespread protests from residents over concerns about its environmental impact and its tax contributions to the Panamanian state.
The mine accounted for approximately 5% of Panama's GDP and was its second-largest revenue source after the Panama Canal.
(Reporting by Elida Moreno; Additional reporting by Divya Rajagopal; Writing by Natalia Siniawski; Editing by Sarah Morland, Brendan O'Boyle and Jamie Freed)
