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There are moments in investor–state disputes when the legal machinery, complex and meticulously constructed as it may be, seems to pause. Not to unwind itself—but to make space. For diplomacy. For recalibration. For, perhaps, a more human reckoning with what the law alone cannot settle. The Cobre Panamá arbitration between First Quantum Minerals and the Republic of Panama became one such moment.
On 31 March 2025, First Quantum formally withdrew its International Chamber of Commerce (ICC) arbitration against Panama. It also suspended potential investor–state dispute settlement (ISDS) proceedings under the Canada–Panama Free Trade Agreement (FTA). What had once been a thunderous $20 billion threat turned, quite suddenly, into an invitation to talk again (Reuters, 2025a; FT, 2025). And while some saw retreat, others saw realism—perhaps even a touch of strategic grace.
This wasn’t just about copper. It rarely is.
A Mine, a Movement, a Shutdown
Let’s step back. The Cobre Panamá mine is no minor operation. Run by First Quantum through its Panamanian arm, Minera Panamá S.A., it accounted for about 1% of global copper output (Reuters, 2025b). That’s not insignificant—especially not in a world feverishly transitioning to renewable technologies, which happen to love copper.
But in late 2023, things took a dramatic turn. Panamanians, in massive numbers, hit the streets. Their grievances weren’t strictly economic. The protests were charged by environmental anxieties—alleged damage to water sources, protected ecosystems, a sense that deals were made behind closed doors. The mine became a flashpoint, a symbol of something deeper (Wikipedia, 2025).
Under mounting pressure, the Panamanian government revoked key permits. The mine was ordered shut. First Quantum paused operations. And shortly after, legal filings followed.
Arbitration on the Table—Then Off It
Between November and December 2023, First Quantum launched two parallel processes: one under the ICC, grounded in its concession agreement with Panama; the other, a warning shot under the Canada–Panama FTA, signaling a potential ISDS claim (SEC, 2024).
The number attached to these proceedings? Around $20 billion. That figure wasn’t plucked from thin air—it represented estimated lost earnings, investments, and the chilling effect on future projects (FT, 2025).
But here’s where the tone began to shift. Panama’s government, faced with legal salvos and public distrust in equal measure, made a demand: drop the claims, and we’ll talk. And so, in March 2025, the parties made cautious moves toward each other. Panama allowed partial reopening—export of stored copper concentrate, restart of a power plant (Reuters, 2025b). First Quantum responded, two weeks later, by stepping back from arbitration altogether (Reuters, 2025a).
The Law in the Background, Strategy in the Foreground
Let’s not pretend the ICC arbitration wasn’t serious business. It rested on the dispute-resolution clause in the mining concession, invoking ICC Rules, which are known for flexibility and—importantly—confidentiality. For First Quantum to succeed, it would’ve needed to prove the contract’s validity, Panama’s breach, and a clear link to billions in damages.
Parallel to that, the ISDS threat loomed large. Under the FTA, Canadian investors are entitled to protections like fair and equitable treatment and compensation for expropriation. Cases under such treaties can rattle governments—not just financially but reputationally. They attract media. They attract scrutiny. And they linger.
But here’s the thing: arbitration, especially of this magnitude, isn’t just about winning. It’s also about leverage. You can call it pressure. Or persuasion. Or even a kind of brinkmanship.
The Human Side of Investor–State Tensions
Why did this matter so much? For one, the mine was Panama’s crown jewel—a massive employer, export earner, and cornerstone of economic planning. Its closure rippled through supply chains and government balance sheets.
But it also touched nerves that law doesn’t always soothe. There were real environmental concerns: deforestation, water degradation, potential damage to biodiversity. These issues animated protesters in a way that spreadsheets and shareholder reports simply can’t (Wikipedia, 2025).
And then there’s the political calculus. Governments—especially those in emerging markets—face tricky trade-offs. Uphold contracts, or listen to the street? Honor stability clauses, or respond to environmental outcry? Panama’s institutions, while relatively robust, showed that executive decisions could move quickly under pressure.
Arbitration as Leverage, Not Endpoint
In that context, the US$20 billion claim began to look less like a path to compensation and more like a giant neon sign: We are serious. We will fight. But we’d rather talk.
It’s a common dynamic in high-stakes disputes. Interim measures are sought—sometimes granted, more often resisted. Host states invoke public policy, sovereignty, the will of the people. Tribunals move slowly. And even if a claimant wins, enforcing an award is another saga entirely.
Panama’s assets abroad are limited. Sovereign immunity looms large. A favorable ruling might not translate into real-world payouts. It could even backfire, politically or diplomatically.
So, in a way, First Quantum’s decision to withdraw makes sense. Not as a defeat, but as a recalibration. A signal that there’s more than one way to protect an investment.
What’s Next? Probably More of the Same—But Better Calibrated
There’s little doubt negotiations will continue. They may involve revised contract terms, stronger environmental safeguards, better community outreach. These aren’t just public relations moves—they’re survival strategies in a world that’s increasingly skeptical of extractive industries.
Panama, for its part, may introduce reforms. Greater transparency in permit processes. Enhanced monitoring. Possibly, even new legislation to clarify investor rights and obligations. After all, reputational damage cuts both ways.
And other governments will be watching. From Chile to Indonesia, resource-rich countries are grappling with similar tensions: how to attract investment while respecting public sentiment and environmental limits.
A Case with Quiet Ripples
In legal circles, First Quantum v. Panama may never become a landmark precedent. There’s no award. No tribunal reasoning to pore over. No final ruling to cite in future briefs.
But in practice, it might matter more than most.
Because it shows that sometimes, the mere possibility of arbitration—especially one with a staggering price tag—is enough. Enough to bring parties back to the table. Enough to remind states that investor protections, however controversial, aren’t going away. And enough, too, to remind investors that law must coexist with politics, policy, and the ever-shifting terrain of public opinion.
That’s not always a comfortable balance. But it’s the reality most resource investors live with now.
Reflections—And a Few Open Questions
Is this the model going forward? Maybe. There’s an emerging pattern: companies invoke arbitration mechanisms not to reach a final decision, but to reset the diplomatic terms of engagement. It’s arbitration as dialogue, not judgment.
But it’s not without risks. If every legal threat is quietly withdrawn, do treaties lose their bite? Do states start to discount arbitration threats as bluffs? Or, worse, does it encourage a form of performative litigation—claims filed not for resolution, but for optics?
Still, in this case, it may have worked. The mine isn’t back to full operation, but it’s no longer at a dead halt. Talks are underway. And that, arguably, is a better outcome—for now—than years of costly, inconclusive legal wrangling.
The underlying tension, though, remains unresolved. It probably always will be.
References
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FT (2025) ‘Canadian copper miner drops $20bn arbitration demand against Panama’, Financial Times, 31 March. Available at (Accessed: 2 April 2025).
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Reuters (2025a) ‘First Quantum to discontinue two Cobre Panama arbitration proceedings’, Reuters, 1 April. Available at (Accessed: 2 April 2025).
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Reuters (2025b) ‘Cobre Panama mine ready to suspend arbitration against Panama’, Reuters, 14 March. Available at (Accessed: 2 April 2025).
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SEC (2024) ‘First Quantum Minerals Ltd, Current Report on Form 6-K: Notice of arbitration intentions’, U.S. Securities and Exchange Commission, September 2024. Available at (Accessed: 1 April 2025).
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Wikipedia (2025) 2023 Panamanian protests. Available at (Accessed: 1 April 2025).