Here’s the thing nobody wants to admit: First Quantum’s fate has been hanging by a thread for over a year. But S&P Global Ratings just threw them a lifeline: revising the company’s credit outlook from negative to positive. The reason? Progress toward restarting Cobre Panama, the copper mine that was supposed to be a cash-printing machine before Panama’s government pulled the plug in late 2023.
The big question now isn’t if the mine restarts. It’s when: and what that means for a copper market already stretched thin.
The Timeline Just Got Real
S&P expects Cobre Panama to restart in the first half of 2026. Not “eventually.” Not “pending regulatory approvals in some distant future.” H1 2026. That’s three to six months away.
And here’s the kicker: S&P anticipates a formal government approval announcement within three months. That timeline isn’t speculative: it’s based on visible progress and political signals from Panama’s government. President José Raúl Mulino has been signaling a more constructive approach, including plans that could allow First Quantum to process the roughly 38 million tonnes of low-grade stockpiled ore sitting at the site.
That stockpile alone represents about 70,000 tonnes of copper. Processing it would take approximately one year and could begin within three months of formal approval. That’s not a small consolation prize: that’s a bridge to full production restart.
What First Quantum Has Already Done
First Quantum hasn’t been sitting idle. They’ve been positioning the mine for restart, even while negotiations dragged on. Here’s what they’ve already executed:
- Sold idled inventory and exported existing copper concentrate
- Restarted the power plant in Q4 2025
- Advanced an independent audit to satisfy regulatory requirements
- Maintained site infrastructure to avoid deterioration
These aren’t symbolic gestures. They’re operational prep work that compresses the timeline between government approval and actual copper production. The company is treating this restart as inevitable: and S&P’s revised outlook suggests the market is starting to agree.
The Numbers That Actually Matter
Once Cobre Panama is back online, it’s expected to contribute approximately 120,000 tonnes of copper and 40,000 ounces of gold in fiscal 2026. That’s not full capacity yet: production ramp-up takes time: but it’s material volume in a market where every tonne counts.
At current metal prices: S&P is forecasting copper at $10,500 per tonne and gold at $3,300 per ounce: the mine at full production could generate annual EBITDA exceeding $5 billion. Per year. That’s not a typo.
For context, First Quantum’s entire enterprise has been operating under financial strain since the shutdown. Zambian operations have been carrying the load, but they’re not Cobre Panama. Nothing else in the portfolio comes close to that level of cash generation. A successful restart doesn’t just stabilize First Quantum: it transforms the company’s financial trajectory.
Why Panama Changed Its Mind
Panama’s about-face is worth understanding. In November 2023, the country’s Supreme Court ruled that Cobre Panama’s mining contract was unconstitutional, triggering nationwide protests and forcing the mine’s closure. The political backlash was brutal. For months, it looked like the mine was finished.
But here’s where politics and economics collide. Cobre Panama represented approximately 5% of Panama’s GDP when operational. The mine employed thousands directly and supported tens of thousands more jobs indirectly. Tax revenue. Export earnings. Infrastructure investment. All gone overnight.
President Mulino’s government is taking a more pragmatic approach. They’re not reversing the Supreme Court decision: they’re negotiating a new framework that could allow operations under different terms. The stockpile processing plan is part of that reset. It allows the government to demonstrate progress, allows First Quantum to generate cash flow, and buys time to finalize a long-term operating agreement.
Critically, Mulino has stated his administration is pursuing a “constructive approach” to resuming operations. That’s diplomatic language, but it’s a 180-degree shift from the previous administration’s stance. Actions are following words: the government has allowed First Quantum to maintain site access, restart infrastructure, and begin preliminary processing steps.
The Copper Context You Can’t Ignore
This restart isn’t happening in a vacuum. Global copper supply is tight. Demand from AI data centers, electric vehicles, and grid infrastructure is hammering fundamentals. Major projects are delayed. Permitting timelines are stretching. Grade decline is real at legacy operations.
First Quantum bringing 120,000+ tonnes of annual copper production back online matters. It doesn’t solve the structural deficit: we’ve covered that problem extensively: but it helps. Every major copper producer globally is watching this situation because new supply sources are scarce and increasingly difficult to develop.
The timing is also notable. S&P’s $10,500/t copper forecast for 2026 is conservative compared to some bullish calls in the market. If copper prices run higher: which several analysts expect given supply constraints: Cobre Panama’s economics improve dramatically. The mine was designed and built during a different price environment. Current fundamentals make it even more valuable.
What Could Still Go Wrong
Let’s be clear: this isn’t done yet. S&P’s positive outlook is conditional on continued progress. Renewed delays or a breakdown in negotiations with Panama’s government could reverse everything. And there are legitimate risks:
Political volatility: Panama’s political environment remains sensitive. Public opinion on mining is mixed. Environmental groups remain opposed. Another government shift could change the trajectory.
Operational risks: Restarting a mine after extended shutdown isn’t simple. Equipment degradation. Workforce reconstitution. Supply chain reestablishment. Ramp-up delays are common in restart scenarios.
Zambian exposure: S&P specifically noted that disruptions at First Quantum’s Zambian operations: combined with Panama delays: could reverse the outlook. Zambia has its own political and regulatory risks. Resource nationalism is a persistent theme across African copper producers.
Financial leverage: First Quantum’s balance sheet has been strained. The positive outlook assumes successful restart and production ramp-up. If either falters, refinancing pressures could resurface.
But here’s where S&P’s revision matters: they’re not betting on hope. They’re responding to tangible progress and improved liquidity. First Quantum has strengthened its financial position during the shutdown through asset sales, cost controls, and strategic financing. The company has runway to execute the restart without immediate liquidity crisis.
The Strategic Calculus Here Isn’t Subtle
For First Quantum, this is existential. Cobre Panama was supposed to be the crown jewel asset: a tier-one copper deposit with decades of mine life and strong economics. Losing it permanently would have fundamentally reduced the company’s growth trajectory and strategic value.
For Panama, this is about economic pragmatism. The country needs the revenue, employment, and infrastructure investment that Cobre Panama provides. Finding alternative sources of comparable economic impact isn’t realistic in the near term.
For the copper market, this is about supply relief at a time when every tonne matters. The industry is already facing structural deficits, and major new projects take years to develop. Bringing existing capacity back online is the fastest path to adding supply.
What Happens in the Next 90 Days
S&P expects a formal government approval announcement within three months. That’s the critical milestone. If that happens on schedule, here’s the likely sequence:
- Month 1-3: Formal approval granted, processing of stockpiled ore begins
- Month 3-12: Stockpile processing continues, generating ~70,000 tonnes copper
- Month 6-12: Full mining operations resume, production ramp-up begins
- 2026-2027: Gradual return to full production capacity (300,000+ tonnes copper annually)
That timeline gets First Quantum to positive cash flow in late 2026 and full production economics by 2027. It also gets meaningful copper supply back into global markets during a period of elevated prices and tight fundamentals.
The real test is whether Panama’s government follows through. Political promises are one thing. Regulatory approvals, contract finalization, and operational permissions are another. But the fact that S&P: a credit ratings agency that profits from being conservative: is willing to revise its outlook based on current progress suggests the probability of restart has materially improved.
The Bottom Line
First Quantum’s credit outlook revision from negative to positive isn’t just a ratings technicality. It’s a signal that Cobre Panama’s restart has moved from “possible” to “probable.” The timeline is compressed. The economics are compelling. The political environment has shifted.
Risks remain. Delays are still possible. But momentum is building in a way that wasn’t visible six months ago. For a copper market already stretched thin, getting 120,000+ tonnes of annual production back online matters. For First Quantum, it’s the difference between survival and growth.
The clock is ticking toward H1 2026. Within 90 days, we’ll know if this positive outlook was justified: or if Panama’s copper comeback story hits another roadblock. Either way, the stakes couldn’t be higher.
