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“We will always be a growth company” – Tristan Pascall, CEO of First Quantum Minerals in London
The highs and lows of copper are not quite as far apart as memecoins or stonks, but in the last couple of years more than the usual number of fires have been lit and doused under the red metal.
Copper futures trading, where lots now regularly add up to millions of nominal tonnes of metal daily, is amicably divorced from the facts on the ground where cycles are measured in years, if not decades.
Traders were playing Panama Hold’em (as one investment bank put it) last year as neophytes and old-timers alike predicted a new bronze age.
That poker game has not reached the river, or given the vagaries of Central American internal politics, perhaps the flop.
When you’re in a hole but can’t keep digging
When the gap in the global copper supply chain left by Cobre Panama will be plugged, remains one of the biggest known unknowns for the direction of the copper price.
Kilotonne 300-plus copper mines don’t just come and go, but two years on, the mine built and operated by First Quantum Minerals is still gathering dust moisture in the rural north of Panama.
Recently, MINING.COM sat down with Tristan Pascall in FM’s London offices to talk about what must be one of the most challenging jobs in top tier copper mining at the moment.
And that’s amid stiff competition as the more recent shutdowns and production disruptions at peers amply show.
If ever there was a baptism of fire for an incoming mining CEO it would be the November 2023 shutdown of a $10 billion mine barely 18 months into tenure.
Pascall joined FM in 2007 and became CEO in May 2022. If ever there was a baptism of fire for an incoming mining CEO it would be the November 2023 shutdown of a $10 billion mine barely 18 months into tenure.
Dressed casually and looking relaxed notwithstanding FM’s sticky wicket, Pascall must be yearning for a future date when every conversation about global copper does not open with Cobre Panama and “when?”. But that time has not come, at least not yet.
Sleeves rolled up, tall and just this side of 50, Pascall, in a mild Australian accent that comes closer to the surface now and then, says of the state of play in Panama:
“In one word: Momentum.”
FM has now shipped all the 121,000 tonnes of concentrate, which as a small consolation, has increased in value after crusting over dockside for 18 months. Pascall says FM had to bring in specialized gear to process it safely, but that “every step like this builds confidence that we can find a way forward together.”
And the proceeds should come in handy as reopening costs begin to add up and arrears payments of royalties to Panama come due.
Self-preservation
FM flagged rising costs for the so-called preservation and safe management plan, approved by Panama in May, to around $18 million per month, but that, crucially, is mostly due to the restart of the onsite power plant and the hiring of new employees for that purpose.
FM says the first 150 MW unit will be connected to the grid, which it supplies with excess capacity, this month. Refurbishment of major equipment has already begun, opening the possibility of processing the 14 million tonnes of ore stockpiles at about 0.5% copper before pit operations restarts. Everything counts in large amounts.
Although, exactly when FM’s top brass will darken the door of the Palacio de las Garzas remains as murky as the surf around Panama City.
Under the auspices of the Panama environment ministry, a six-month independent audit of the operation began in early October conducted by global mining services firm SGS. The mine has passed environmental audits with flying colours before.
But this study will also encompass social and fiscal compliance (as broad a framework as you can get), which could lay the groundwork for future negotiations. Although, exactly when FM’s top brass will darken the door of the Palacio de las Garzas remains as murky as the surf around Panama City.
Given the size and complexity of an operation like Cobre and the duration of the mothballing, FM says it will take six to nine months to get back into production, and longer to reach nameplate capacity of 100 million tonnes per year.
Cobre Panama was well on its way to that milestone – which would turn it into a top 3 global mine for ore throughput – before the shutdown. Just another bitter pill the onsite project team have had to swallow.
From a copper supply perspective, investment banks are beginning to pencil in delivered Cobre kilotonnes for later in 2026 and with TSX:FM still 25% below its pre-shutdown level, sell ratings have evaporated and buys outnumber holds 14:9.
Little by little
While the property is being primed, Panamanian politics still appear to be moving at a glacial pace (not that anything else in the environment can remotely be called glacial).
President José Raúl Mulino has made positive noises about Cobre Panama and even included a nod to the mine’s impact on jobs in a recent address to the nation:
“Little by little, we have been lowering the level of tension with Minera Panamá. The company is in the process of reactivating the mine for maintenance purposes — that is what has been popularly referred to as the job fairs.”
The industry minister recently said the government is expected to have all information to begin talking late this year or early 2026. In October the finance minister said it will insist on resource ownership once talks begin, something Pascall acknowledged in the company’s Q3 conference call.
Despite most of President Mulino’s priorities since taking office achieved and sentiment among Panamanians struggling with high unemployment warming towards a reopening, the lack of urgency displayed by the government remains perplexing.
“Has it surprised me? [that it has taken this long] Look, it’s taken a while, no doubt. It was clear we needed that political transition to settle before meaningful progress could happen. Now that we’re past that, the conversation is shifting, and I’m optimistic we’re on the right track.”
Not your grandfather’s mining CEO
Mining companies operate in far more countries and frontier states than oil and gas. Miners are scattered around jurisdictions that vary in predictability from Finland to, erm, Panama and clustered around mineral concentrations that frequently cross borders.
Mining’s footprint, by its nature, is larger than oil and gas. You can hide an oil derrick or fracking pump behind a hill that would go unnoticed inside a pit. Large scale consolidation in the mining industry has been unsuccessful and state-backed actors are mostly focused domestically. There’s no Big Mining like there’s Big Oil, that can throw its weight around.
All of this makes the operating landscape much riskier than oil and gas and exposure to domestic politics leaves even larger operators like FM vulnerable, as Cobre Panama amply illustrates.
Still, the global mining industry still has a lot to do and learn to inoculate itself against politics, the NGO industrial complex, armchair celebrity critics and not to put too fine a point on it – baffling ignorance about the industry.
Cobre Panama hit the social media trifecta with Greta Thunberg, Leonardo Di Caprio and Orlando Bloom (who’s that again?) chiming in.
Cobre Panama hit the social media trifecta with Greta Thunberg, Leonardo Di Caprio and Orlando Bloom (who’s that again?) chiming in. (The irony that Cobre Panama started out as a UN project in the 1950s, were clearly lost on those who love to address the assembly on how to save the world).
Pascall, acknowledges the industry’s shortcomings, and the changing role of the mining CEO:
“Look, I think where the industry—and we ourselves—have let ourselves down is that we’re engineers at heart. Engineers deal in binary facts, numbers, data.
“And that’s just not enough anymore to connect with a population. Unlike most industries, mining doesn’t have an end customer we can point to.
“There’s no branding, no direct link to the people using the end products. That’s a gap we’ve got to bridge, and it’s on us as leaders to do it.”
In Panama FM’s public outreach program has only intensified with 170,000 Panamanians reached directly through over a thousand public events. Some 325,000 people have taken a virtual tour.
Call it a charm offensive if you have to, but that it needed to be done at this scale in a small country where the benefits of a $10 billion foreign investment in a “forward facing” and high-demand commodity would have been obvious to politicians and citizens alike is a warning to developers with social licence challenges (which is all of them).
The mining is the message
Setting aside juniors and IRs talking their book, with notable exceptions mining skills don’t overlap all that much with marketing skills and not that long ago that did not matter.
“Engineers don’t naturally think like communicators. Most of us are happiest in a spreadsheet, running calculations, optimizing systems. But the reality is, we’ve got to talk to the people out there – the end users of these metals, even if they don’t know it’s us supplying them.
“My father, who built this company, wasn’t big on media; he’d rather be out finding deposits and building mines.
“Me? I’ve had to adapt. If I had to choose, sure, I’d love to be out there discovering the next big project—but speaking to you, to communities, to governments, that’s part of the job now, and it’s critical.”
While local initiatives can have a tangible impact on a global level, mining remains a misunderstood and underappreciated industry – despite all the attention critical minerals are receiving. Pascall talks about how end users have become divorced from mining supply chains.
Copper miners and smelters used to take out full colour broadsheet ads mid-20th century touting the benefits of the metal. That copper had to be officially designated a critical mineral would have seemed absurd to the old timers.
That copper had to be officially designated a critical mineral would have seemed absurd to the old timers.
From Raw Material to ‘Number, Please’ says one, with a drawing showing a “fiery snake” and being turned into a telephone line (no PPE for the worker handling the “red-hot copper” of course). Anaconda Copper & Brass celebrates Edison explaining “How electricity spring into being in the arms of copper”. Paul Revere built the first copper rolling mill in the United States in 1801 (who knew?). And then there’s Kennecott explaining why “The lady chooses brass and copper”.
Whether a marketing campaign like the evidently successful Touched by Gold from the World Gold Council and Elton John could work in the less sexy corners of resource exploitation is debatable. Touched by Copper with Taylor Swift anyone?
Relying on its roots
Were Cobre Panama to come back online, free cash flow would get a multi-billion dollar boost. Even a much larger company than FM would have a hard time doing without for what is looking like a two-and-a-half-year ordeal at best.
Shoring up the balance sheet has been a top priority for Pascall, who before joining FM spent almost a decade in finance armed with an MBA from Paris and Singapore’s INSEAD.
FM managed to pay down just over $700 million in net debt in its most recent quarter after tapping credit markets. At the end of Q3 FM was sitting on a $4.7 billion debt pile (compared to a $17 billion market cap).
FM traces its roots back to Zambia in the 1990s, first as a small tailings reprocessor co-founded by Pascall’s father Phillip Pascall (and the obligatory game lodge before that).
The Trident complex made up of the Sentinel copper and Enterprise nickel mine, and the Kansanshi pit only around 140 km away are carrying the company through the no-Panama period and after expansions at both will contribute an estimated 370kt to FM’s attributable production next year, ramping to more than 450kt by 2028.
Zambia has been golden for FM. A year ago there was much talk about a Saudi Arabian investment in Zambian copper mining and at the start of this year the southern African nation inked a suitably-vague sounding memorandum with the Kingdom to “foster co-operation across the mineral value chain.”
Given the attachment and history of the company to the African nation that streaming deal would’ve come as a relief to FM management well beyond its balance sheet.
FM never did sell off part of its Zambian operations and in August shook hands with Royal Gold for a nice round $1 billion prepayment on a gold stream that is already in its coffers. Timing is sometimes everything.
The streaming deal, Pascall told local media, made the selling a minority stake in its Kansanshi copper and Sentinel copper and Enterprise nickel operations in the country unnecessary. “We’re more open to partnerships, and that includes in Zambia.”
The Royal Gold stream does not involve a nuggety, shallow gold discovery at Kansanshi, stumbled upon during pre-stripping at S3.
While this early exploration project will not show up in the books for a long time, gold as a byproduct will play a big part in FM’s future as with other copper miners lucky enough to have both. Across its properties FM’s gold resources total just under 25 million ounces and even without Panama will produce some 132k attributable ounces this year.
Given the attachment and history of the company to the African nation that streaming deal would’ve come as a relief to FM management well beyond its balance sheet.
This used to be a mining town
This phrase usually conjures up empty houses, broken fences, and derelict plants in a nowhere tiny town that hasn’t seen life since the last panning gold rush. For FM in Zambia, that’s not an option.
After touring both operations, not much more than a 15-minute flight from each other in Zambia’s far northwest, it’s soon evident how closely the company is associated with the country and the communities around its mines.
At one of the first media briefings at Sentinel a satellite image of the town the mine gave birth to – Kalumbila – is displayed. From a settlement with little more than a hundred souls eking out a bare existence, the town now has a population of well over 5,000. Sentinel started production in 2015.
The town’s airport – built by FM – can accommodate airliners connecting the remote north-west near the Congolese border to Lusaka (hence the short flights). The FM-backed FM radio station, now broadcasts regionally bringing much needed cohesion to what remains a sparsely populated part of the country.
The week following the tour a brand new hospital was handed over to the local government and a masterplanned worker township is under construction. With a mine life of less than 15 years as it stands, FM is focusing on supporting independent businesses and industry. Zambia has also introduced local sourcing regulations starting at 20% mid-2026 and increasing to 40% early next decade.
The company’s training academy, which includes three years of training and mine experience, attracts around 1,500 applicants per year. There are nearly 200 students currently enrolled annually, and more than 500 FM workers have graduated from the program.
Naturally agriculture is a focus – one enterprising farmer is now exporting peppers to the US – after being taught modern farming methods that have produced yields higher by factors. An industrial park called the Kalumbila Multi-Facility Economic Zone is being expanded.
The tour bus passes a few new condo and townhouse developments near the town centre.
Kalumbila is expected to continue to grow thanks to its position on the now US supported Lobito corridor and the fast-growing mining and exploration activity across the border in Angola and Congo.
Can do Kansanshi
The region remains underexplored despite forming part of the same belt as Ivanhoe’s Kamoa-Kakula, one the most significant copper discoveries of the past several decades.
With the bulk of the outlays at its ahead-of-schedule and below budget S3 Kansanshi expansion project in Zambia behind it, FM in its Q3 conference call guided down capital expenditure for 2025 which is now expected to be in the $1.2 billion range for 2025.
Kansanshi is turning into a real giant with annual throughput on its way to 150 million tonnes and a mine life extending to the middle of this century.
Kansanshi is turning into a real giant with annual throughput on its way to 150 million tonnes and a mine life extending to the middle of this century. FM believes in innovation and Pascall says the company is not afraid to take risks or experiment with industry rules of thumb.
The company is trialing a first of its kind rail run conveyer system that slashes energy requirements (by as much as 70%) and maintenance costs compared to traditional conveyer belts that run on rollers. FM was also the first to use semi-mobile crushers at the site.
The company has long run an electric trolley system to assist the 220t trucks getting out of the pit – not only does it save on fuel, but it also covers ground at twice the speed of diesel hauls.
The company and Hitachi, which stayed mum on deeper details no matter how often asked, is also testing an all-electric haul truck, another world first. The truck’s battery – a 4MW monster with a capacity around 70 times your average EV – will be charged by the overhead trolley cables.
FM has long term designs on Zambia and apart from ongoing drilling on its properties, kicked off with an investment in Prospect Resources, a project near its Trident operations.
A core corps
The need to shore up the balance sheet does not mean FM is reining in its growth strategy, says Pascall.
But it will come with a few tweaks to adapt to the global realities of copper mining today. Lower grades, needing bigger and more complex projects, rising costs and uncertain jurisdictions.
“First Quantum is fundamentally a copper mining company, but we see ourselves more broadly as a growth company. Our strength lies in developing and executing large-scale mining projects that deliver shareholder value and contribute to global copper supply.”
For FM, the allure of green fields remains strong. Building new mines – and doing it in-house – is a point of pride and Pascall references more than once the company’s “unique entrepreneurial culture.”
Pascall was project director for Sentinel in Zambia built from 2009 and going into production in 2015 for an outlay of over $2 billion. Sentinel is now the largest contributor to FM’s copper output with annual output of more than 200kt.
From there Pascall straight away parachuted into Panama, bringing Cobre into production in less than five years – lightning fast in copper terms.
“I was on site for four and a half years all the way through that build, which was really about making sure that when we built the project that we could turn it on, and we turned it on in six months, and that’s an enviable comparison to many projects out there.”
(That it must also be a disappointment for Pascall on a personal level that the mine is sitting idle, goes unsaid.)
FM has a core engineering, construction and procurement team that has moved from project to project, getting involved early on and seeing projects through to completion. That more than 150 Panamanians are working on Zambia during the wait is testament to this approach.
Why not 80 million?
Pascall is not a fan of farming out core work when bringing a project into production because as non-owners EPC contractors are always on a “misaligned trajectory”. While certain technical work will still be farmed out – Pascall mentions marine engineering as an example – he says, “more and more we find as the owner, we can’t pass the risk on.”
Pascall says FM probably does as much as 70% of all the work in-house. That makes the company something of an outlier when it comes to large scale mining projects, particularly in more recent history as projects continue to grow in complexity and scale and outsourcing became the model.
“The risk remains with us, contractualized or not. Why would we want to end up in a battle with lawyers when actually, you know, the damage is not delivering on time and on budget and we wear that.”
When building Cobre Panama, the company was able to change the fundamentals of the mine plan halfway through the development process.
The avoidance of EPC contracts is not just for when things go wrong, keeping things in house gives you flexibility, rapid decision making and quick approvals. Pascall points to the fact that when building Cobre Panama, the company was able to change the fundamentals of the mine plan halfway through the development process.
“And the reason we’re able to do that was because, the person building the project, the person operating the project, and the person commissioning the project, are wearing the same t-shirt.
“In fact, the design might be wrong. You might find that over the intervening four years that you thought this 60 million tonnes per annum project would be much better if it started at 60 million, but then it went to 80 million.
“That’s exactly what we did at Cobra Panama. In the middle of the project, we accelerated and added an expansion to the project. And the reason we’re able to do that is because we don’t have to go and sign a new contract to do that, we make the change.
Betting FM on the farm
The company controls three of the largest undeveloped copper deposits in the Americas – Taca Taca in Argentina, and La Granja and Haquira in Peru.
Together the three projects boast more than 30 million tonnes of contained copper (and a tasty 12 million ounces of gold and enough molybdenum to sweeten the pie further). Orebodies of this size are scarce, even more so at medium grades.
A decision on its $3.5 billion Taca Taca project is in the offing not least because of Argentina’s large investment incentive program deadlines. An updated study on Taca Taca is due by the end of the year.
FM says it will consider partners for Taca Taca, although given its history of bringing large scale copper mines into production and should Panama start producing again, a company with such a large appetite may just go it alone again.
That Rio Tinto (coming off a long and not very happy history expanding Oyu Tolgoi in Mongolia) tapped FM for a 55% stake and to build and operate another gigantic project on highly favourable terms is another indication of how the industry views the FM team.
The La Granja deal “wasn’t up there in the deals in terms of dollars, in terms of copper in the ground is one of the largest deals done in the last 10, 20 years.”
Pascall says while the La Granja deal “wasn’t up there in the deals in terms of dollars, in terms of copper in the ground is one of the largest deals done in the last 10, 20 years.”:
“They saw in First Quantum a partner that could want a challenging project, because it’s challenging from an engineering perspective, and particularly around deleterious elements that are there like arsenic.
“We had a development hypothesis that we went to Rio with, and really that revolved around dealing with the orebody in a different manner that provided the opportunity to process in a conventional flow sheet.
“We’d been validating that subsequent to the agreement, and that was to do a whole lot of drilling that understood the delineation of the orebody in much finer detail.”
The 1MTPA
What Rio Tinto brings to the table to develop La Granja – which like any major project anywhere in the world right now comes with baggage – from FM’s perspective is experience with associated infrastructure, of which La Granja will need a considerable amount of.
As for the bout of M&A activity (more a desire for deals than the consummation of them) currently in the mining industry, Pascall is skeptical.
While not as promiscuous as Teck and Anglo’s talks and Glencore’s frequent overtures to targets, FM has dealt with opportunistic approaches itself. More than once. Although that interested party is likely now very much out of the running.
“I don’t think you’ll see us in big public bidding wars. There’ll tend to be more like a La Granja where we can apply a capability to unlock something that’s been difficult or challenging.”
“That’s certainly what we did at Cobra Panama in terms of delivery there.”
As Sentinel and Kansanshi expand and once Cobre Panama restarts, the company will hit the 750,000 attributable tonnes a year level and closer to 900ktp on a consolidated basis well before the end of the decade.
After that, the South American projects will easily catapult First Quantum Minerals into the rarified one million tonnes per year club.
And that’s a club the copper mining industry – and the energy transition and global economy for that matter – needs to see expand now more than ever.