The Panamanian government has received $29 million in mining royalties from the export of copper stockpiles. Commerce and Industries Minister Julio Moltó confirmed the funds will be directed to infrastructure in communities near the suspended Donoso Copper Mine.
Minister Moltó detailed the transaction during a press conference on Wednesday, December 12. He stated that over 122,000 tons of copper concentrate were exported in September under a state preservation plan. The resulting $29 million payment to the state was processed just days before the announcement.
“These funds belong to all of Panama and will be allocated entirely to public works for the benefit of the country,” Moltó said, quoting President José Raúl Mulino’s directive. [Translated from Spanish]
The immediate allocation marks a shift in how mining-derived revenue is managed. Moltó emphasized the government’s focus is now on tangible community benefits rather than abstract financial figures.
Funding Priority Infrastructure in Three Districts
Officials have designated three districts in the Coclé and Colón provinces for the first wave of investments. The projects target healthcare, education, water, and road access. A total of $6.7 million has been earmarked for these initial priority projects.
In Omar Torrijos, $3.5 million will expand the Coclesito Health Center and improve local roads and electricity. Donoso will see a $1.95 million investment for road construction and health center repairs. For La Pintada, $1.25 million is set aside for school upgrades, water system improvements, and road repairs.
Moltó made a firm commitment about the money’s path. He promised it would bypass bureaucratic overhead entirely.
“These resources will not go to the bureaucracy, they will not be spent on consultancies or offices; they will go to the Panamanian people,” the minister stated. [Translated from Spanish]
The national program is expected to expand to other regions soon. This approach aims to address historical grievances where communities saw little direct benefit from mining activity.
Royalties Cover Costly Mine Maintenance
A central part of the government’s strategy involves using the royalties to offset immense preservation costs. Since the mine’s operational suspension in December 2023, monthly maintenance has averaged $15 million. The total cost has reached at least $360 million.
Moltó presented a clear choice. Should public tax revenue cover this bill? The government’s answer was a definitive no. Instead, the revenue from the exported concentrate will finance the required safe preservation plan.
This financial maneuver ensures the copper mine operator, First Quantum Minerals, bears the cost of maintaining its idled asset. The state avoids dipping into its treasury for these expenses.
“The company will pay for the mine’s maintenance,” Moltó explained, describing the arrangement as a responsible fiscal technical decision. [Translated from Spanish]
The minister was careful to distinguish this export from a resumption of mining. He reiterated it was a one-time action under a pre-existing preservation plan designed to ensure community safety and site stability.
Future Revenue and Ongoing Audit
Looking ahead, the Government of Panama is evaluating other materials on site for potential processing. The goal is generating additional revenue. Any future funds would support further site maintenance and national projects while the mine’s ultimate fate remains undecided.
An independent environmental audit of the Cobre Panamá site continues under the Ministry of Environment. Moltó confirmed preliminary results would be publicized as soon as they are available. This audit is a critical component of the government’s assessment process.
The announcement follows a notable statement from First Quantum Minerals’ CEO in late October. Tristan Pascall acknowledged the Panamanian state’s ownership of the copper as a starting point for any future negotiation. This admission from the company aligns with the state’s current actions to control and monetize the resource.
For the Mulino administration, this episode represents a model for handling complex natural resource issues. It seeks to balance fiscal responsibility, social investment, and environmental stewardship. The direct investment in community infrastructure is a deliberate attempt to rebuild public trust after years of divisive national debate over mining.
Minister Julio Molt framed the government’s actions as a break from the past. He argued previous discussions focused only on profits and corporate interests, neglecting the human impact on nearby populations. The current approach claims to invert that priority, putting community needs first while safeguarding the Panamanian state’s financial interests.
Further details on the broader national investment plan funded by these royalties (mining) are expected soon. The government has signaled this is just the initial step in a larger strategy for managing non-operational mining assets and their revenue.