A massive, embattled copper mine in Panama turns to Trump for rescue

Critical minerals play a major role in America’s economic competition with China. The race to develop mineral projects overseas will only become more important as markets tighten. The US still sources most of its critical minerals from China, and the Biden administration was criticized by some economists for moving too slowly to diversify that supply chain, for example by striking new free-trade agreements with mineral-rich countries in Africa and Latin America.

The rush for global minerals is to a large extent a zero-sum game: Much of whatever isn’t locked up in long-term offtake deals by the US will likely go to China. So even if Trump isn’t enthused about supporting US clean energy companies per se, he could look at overseas mining as a forum in which to squeeze China. There aren’t many paths available for the US to lock in large new streams of copper in the near term: Cobre Panama is one.

Disputes over the mine date at least to the early 2010s, when Pascall’s father acquired the site and forged a close relationship with then-Panama President Juan Carlos Varela. The project was grandfathered into a low royalty rate that eventually, as copper prices began to climb, drew increasing public scrutiny even as the mine became one of Panama’s biggest employers. Environmental groups also protested against the mine’s impact on the surrounding ecosystem. Eventually Panama’s top court ruled the mine’s contract unconstitutional, and it was closed.

While the Biden administration worked to support other new mining projects in Brazil and Argentina, it “didn’t really get involved in,” the Cobre Panama dispute, said Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies, a Washington think tank. That was frustrating to some in the mining sector, she said: “[The US] actually had a lot of room to negotiate, to be supportive, and we didn’t.”

There are a number of steps the Trump administration could take to catch up to China in Latin America’s minerals market, Baskaran said. It could broaden the pool of countries that US companies can source minerals from and be eligible to claim Inflation Reduction Act tax credits. It can tap the US International Development Finance Corporation to underwrite projects and lower the cost of capital for private developers. It could add copper to the federal critical minerals list, which would make copper projects eligible for more investment incentives. And it could appoint ambassadors to mineral-rich countries who understand the market and are motivated to hammer out deals.

In the case of Panama, Trump is already likely to be in close contact with Quintero about the flow of migrants through the Darién Gap, and could include copper in a larger deal on immigration. For First Quantum’s part, Pascall acknowledged that the company has fallen short in the past on ensuring the project benefits a majority of Panamanians, and said he remains optimistic that an agreement on the mine’s tax rates and environmental protection measures can be reached in 2025. “We need to deliver outcomes that people understand,” he said. But with the company’s shareholders — most based in the US — looking on, it needs to find a conclusion soon: “Nobody can defy gravity forever.”

Urgency around the Cobre Panama mine would be greater if the copper market was in more dire straits, but weakening demand in China could send prices downward in 2025, analysts say. That trend would accelerate if Trump ramps up tariffs on Chinese exports.