The presidential election saw victory for the pro-business former minister Jose Raul Mulino. His campaign was heavily focused on economy and growth, while the Cobre Panama issue was absent from the electoral debate. 

Mr Mulino became a candidate late in the campaign after former President Martinelli was barred from running because of a money laundering conviction. The newly elected President promised to run a pro-business administration and drive increased foreign investment to reach a 7% GDP growth. Mr Mulino refrained from making any statements about Cobre Panama, but it is a topic that he will not be able to ignore for very long.

Panama’s GDP growth is forecast to slow from 7.3% in 2023 to 2.5% in 2024 according to the IMF, mainly due to the closure of the Cobre Panama mine and a drought which has impacted shipping traffic in the Canal. Cobre Panama, owned by Canada’s First Quantum Minerals (FQM), saw 330,000t copper production in 2023, accounting for 5% of Panama’s GDP and about 1% of the world’s total copper output.

The mine was forced to shut down after Panama's top court ruled that its contract was unconstitutional. The court’s verdict followed mass demonstrations by social and environmental activists, with the issue becoming increasingly politicised as the elections came closer. Subsequently, FQM initiated an international arbitration procedure.

Given the pro-business, pro-growth stance of the newly elected President, the prospects for a settlement with FQM appear better although any solution will take time. A first indication of the new political environment will come from the 121,000t of copper concentrate already mined and stockpiled at the mine and claimed by FQM. The question is whether the copper concentrate was mined before or after the ruling invalidating the contract.

With copper prices close to U$10,000/t and given a rising interest in the metal, evidenced by BHP’s recent offer for Anglo American, it would be in Mr Molino's interest to find an agreement with FQM in the not-too-distant future so that he could deliver on his growth promises and start attracting more foreign investment.