Keith Green, the Country Manager of Cobre Panamá, a subsidiary of the Canadian company First Quantum Minerals, underscores the significance of clean energy in achieving sustainability objectives.
In light of this, the World Bank has issued two reports in 2017 and 2020, indicating an increased demand for minerals to facilitate the world’s transition to a higher adoption of clean energy. As the Country Manager overseeing the largest copper mine in Panama and the broader region, what are your thoughts on this matter?
During the recent United Nations Climate Change Conference (COP26) in Glasgow, there was a strong emphasis on the urgent need for a global shift toward clean energy. On November 4th, the United Nations made a historic announcement that 25 countries, including the United States, have signed a declaration committing to cease international public support for the fossil fuel sector by the end of the upcoming year. Instead, they are prioritizing a transition to cleaner energy sources. This milestone represents a significant advancement toward global sustainability.
Nevertheless, in order to actualize this shift, it is imperative to confront the escalating requirement for elevated mineral production. As indicated in the aforementioned reports, the transition to clean energy necessitates a heightened demand for minerals, with copper standing out as a crucial element due to its indispensability in technologies such as wind, solar, and hydroelectric power, among others. This predicament presents a paradox, as the number of operational mines diminishes while the demand for minerals to facilitate emissions reduction and combat climate change continues to surge. World Bank experts contend that the remedy lies in the practice of responsible and sustainable mining.
Cobre Panamá exemplifies the essential role of mines in the shift from fossil fuel usage to renewable energy. As the most substantial private investment in the country, with a total investment of $6.7 billion, our operations have yielded approximately 330,000 tons of copper annually since our inception in 2019. However, it’s worth mentioning that the year 2020 deviated from normal operations due to the pandemic.
Furthermore, we have an extensive framework of environmental obligations and regulations, along with robust conservation strategies carried out in partnership with prestigious international scientific organizations such as the Smithsonian Tropical Research Institute, the Sea Turtle Conservancy, the Peregrine Fund, and Yaguará. Additionally, we have committed to reforesting 10,475 hectares, which is nearly twice the size of the area being utilized for mining activities. Our team dedicated to environmental and social matters comprises 200 highly devoted individuals, whose efforts are instrumental in managing and counterbalancing our environmental footprint.
The magnitude of the challenge before us as a global community is substantial. The creation of this new world hinges on having the necessary natural resources at our disposal. To meet our climate commitments by 2030, we are faced with the following imperatives:
- Electric vehicle adoption must increase by a factor of ten compared to the previous year.
- The number of electric charging stations must grow by a staggering factor of 31.
- Energy generation must surge by 300%, placing immense demands on the global mining sector, which may need to augment mineral production by 500%.
However, the challenge is not only about meeting these heightened demands; it’s also about the urgency of the matter:
- The development timeline for new mining projects currently stands at 16 years.
- Meanwhile, the construction of a wind farm can extend over a decade.
Keith Green, the Country Manager of Cobre Panamá, acknowledges, “Our primary challenge at Cobre Panamá lies with the coal-fired power plant that provides energy for our operations. This presents complications, as it was part of the project when we acquired it. It’s worth noting, though, that this plant plays a positive role as a stabilizing factor in the national grid, especially during dry months when Panama faces hydroelectric power shortages.”
While our aim is to promote the use of renewable energy, it’s essential to recognize that the construction of renewable power plants can also span up to a decade, and securing an adequate supply of copper for these initiatives may entail even more time.
The Cobre Panamá mine holds the potential to play a pivotal role in meeting the escalating worldwide demand for clean energy. Our commitment to sustaining responsible production underscores our contribution to this endeavor.
This global demand not only offers economic benefits in terms of revenue for the country but also generates increased employment opportunities for its citizens. At present, our workforce comprises around 7,000 employees, with over 5,400 directly employed by Cobre Panamá, and an additional 1,400 as contractor personnel. Remarkably, more than 1,500 employees hail from neighboring communities, positioning Cobre Panamá as the primary employer in the central region of the country, historically lacking formal employment opportunities. Furthermore, a study conducted by Indesa reveals that the mine supports over 39,000 direct and indirect jobs, including engagement with over 1,800 local suppliers.
However, there appears to be a paradox in Cobre Panamá’s involvement in advancing clean energy while relying on coal-derived energy for its mining operations.
It is indeed a contradiction for Cobre Panamá to engage in promoting clean energy while using coal-based energy sources for its mining activities. As a part of First Quantum Minerals, we are actively committed to reducing emissions stemming from our operations at a global scale. In the forthcoming months, our parent company will unveil comprehensive plans for achieving decarbonization.
In the specific context of Cobre Panamá, we confront a noteworthy challenge related to our coal-fired power plant that supplies energy for our operations. Resolving this situation will be a complex task, given that we inherited this infrastructure when acquiring the mining project. Nevertheless, it’s crucial to recognize the positive role this plant plays as a stabilizing force within the national grid and in price stability, particularly during periods of low hydroelectric power availability, such as dry months. To address this apparent paradox, we must adopt a balanced and strategic approach to transition toward more sustainable energy sources in the future.
The Cobre Panamá mine assumes a pivotal role in providing minerals for clean energy and represents a distinct competitive advantage for Panama.
Since commencing its exports in 2019, it has emerged as the country’s primary exporter, as per data from the Panamanian Exporters Association (Apex) and the General Comptroller of the Republic. In 2019, copper concentrate exports constituted 62% of Panama’s total exports. Furthermore, in 2020, Panamanian exports saw a substantial increase of 34.4%, largely attributed to the growth in Cobre Panamá’s exports.
Copper holds a pivotal role not only in the realm of clean energy technologies but also finds a broad spectrum of applications in our daily existence. Over thousands of years, copper has found utility in various facets of our lives. One of its standout attributes lies in its exceptional electrical and thermal conductivity, rendering it an ideal material for applications ranging from electrical cables, telecommunications systems, electronic devices, computers, motors, to household appliances.
Moreover, copper’s versatility extends to the production of coins, jewelry, artistic creations, decorative items, furniture, cosmetics, paints, and musical instruments. It also assumes a foundational role in the transportation sector, finding use in automobiles, trains, airplanes, ships, and even spacecraft.
Given the contemporary challenge posed by climate change and the imperative to expedite the transition to cleaner energy sources, there is a pressing need to augment mineral and metal production, with copper being a vital component of this transition. A prime illustration of this is the fact that electric vehicles necessitate six times more copper than their conventional counterparts.
In summary, copper stands as a versatile and indispensable material in both the realm of clean energy technologies and our daily lives. To address environmental challenges and facilitate a successful transition toward a more sustainable future, there is a pressing need to expand copper production.
In your view, what could be the solution to reconcile the increasing demand for minerals with the imperative to reduce emissions?
This global demand is inevitable and critical for achieving sustainability objectives on a global scale. Panama possesses a competitive edge due to the presence of the copper mine, and through collaborative efforts, we can make strides toward higher clean energy production and broader accessibility for all citizens. As previously mentioned, our company will persist in prioritizing the decarbonization of our operations, offering technology and innovation, and implementing stringent protocols and best practices to safeguard the environment.
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