11:00 p.m
Security issues, as well as investment uncertainty due to the high tax burden and lack of clear rules of the game in legal regulations, have stopped mining companies Agnico Eagle, Fortescue Metals, Barrick Gold, Royal Road Minerals, Iam Gold and Touchstone Gold. operations, possibly to shut down.
It was learned last Thursday that the first four companies on the list had decided to stop exploration missions and to consider leaving the national territory if circumstances did not change.
This was indicated by Juan Camilo Nariño, CEO of the Colombian Mining Association, who confirmed that with regard to public order problems, the “current uncertainty of the country with regard to investment” was added, to take the decision to close activities and leave. Colombia.
The president of the syndicate, who refrained from revealing the names of the mining companies due to secrecy, indicated that they carried out their operations to produce gold and copper in Antioquia, Caldas, Cauca, Nariño, Huila and Putumayo, due to the cessation of mining operations. These activities stop investing in Colombia between US$35 million and US$50 million.
In addition, this situation is known after days of public order problems experienced by the Zijin Continental mining company with its Buriticá gold project, and Mineros with its mission in El Bagre, in Antioquia, which show that they are not the only ones with problems to develop their activities.
Mining companies that stop
Of these four mining companies that raised their operations last year, Agnico Eagle, Fortescue Metals and Barrick Gold did not have bonds for development in Colombia, as confirmed by sources from the National Mining Agency, as their intention was to create joint project with spouses if they own them.
Thus, the four companies have reduced or frozen investments resulting from complex relationships with local communities and legal restrictions on mining regulations.
In addition to the above, the sector must coexist with a government policy that strikes it at the financial and operational levels. Ines Elvira said there are expectations about the proposed new mining law, the ban on open-pit mining, the suspension of mining bonds, the policy to protect unnamed mining, and the new environmental requirements that will be imposed to obtain the license. Vesga, partner at Holland & Knight.
Of the four mining companies, Agnico Eagle is known in the mining sector because it has developed two investment agreements. One, with gold producer Newmont Mining Corporation to carry out exploration activities at the Anzá Project in Antioquia, and two with Royal Road Minerals to fund exploration operations in Colombia and Nicaragua.
Agnico, headquartered in Toronto (Canada), is currently operating in this country and in Mexico, the United States, Finland and Sweden.
Another miner leaving the country is Fortescue Metals, based in Perth (Australia) which arrived in Colombia in 2019 to explore and produce copper.
Since then, it has submitted 64 applications for exploration concessions with the National Agency for Mining in areas with copper and gold potential, in municipalities such as Algeciras, Gigante, Paraya, Hobo or Tello, in Huila, and Puerto Asís, Orito and Villajarzon, in Putumayo. He also requested permission to study in Nariño.
Investments for these tasks amounted to 6,000 million dollars. However, moves by environmental groups began to slow the process, and with the arrival of the pandemic affecting many mining companies, they had no choice but to start returning permits.
In the same year, Canada’s Barrick Gold Corporation, headquartered in Toronto, which analysts consider the multinational company dedicated to the largest gold production in the world, also fell.
Its portfolio consists of the development of 23 mining parks in the United States, Dominican Republic, Canada, Australia, Argentina, Chile, Peru, New Guinea and Zambia. Similarly, half of the extraction volume is obtained from tasks in the United States and Canada, 25% from Australia, 19% from South America, and 6% from Africa.
Barrick currently operates several exploration projects in more than 15 countries. Unlike the other three companies, this one is no longer in Colombia.
slow down the process
The British mining company Royal Road Minerals, which is going to stop its investment in Colombia, is well indicated on the map of the country’s extractive operations.
Its latest move was recorded in June 2021 when it announced through a statement that it had obtained the approval of the authorities to develop the Güíntar, Niverengo and Margaritas projects in Anza (Antioquia).
“The integration and interpretation of new geological information into the projects has come together to identify some deeply compelling new targets,” Tim Coughlin, CEO of Royal Road Minerals, said at the time.
The mining company, which is headquartered in London (UK) and has operations in Saudi Arabia and Argentina, has told the country’s mining sector that it is still in Colombia for the time being, especially when it has title deeds, but has made it clear. They will continue to be very vigilant in making decisions in the future.
The British miner is also focusing exploration efforts on the La Golondrina and La Redención projects in La Llanada (Nariño).
Two more got out
Iam Gold Corporation and Touchstone Gold have been added to the list of four mining companies that have gone out of business.
In the first case, in addition to economic problems and insolvency at the internal level, it was added that the operation they were developing in Teterepe (Antioquia) was stopped by an agreement of the municipal council that prohibited mining tasks in the area. .
The mining complex for medium and industrial gold production began operating in 2010, but today it is in the process of being closed.
For the mining company, based in Toronto (Canada), the management of mining regulations in Colombia is complex and absorbed by the municipal entities, which administer agreements to stop extractive operations before the councils, as well as the Constitutional Court with ruling 095 of 2019 banning it.
Similarly, Iam Gold maintains that although environmental guidelines in the country are dictated by the Ministry of Environment, independent regional companies follow the guidelines of mayors or governors, and this is detrimental to the normal development of the mining operation.
A similar situation is experienced by the Touchstone Gold mining company, which specializes in the production of gold and silver in Segovia (Antioquia) and whose management does not exclude the closure of the operation.
The reason that would prompt them to take the decision is the Ministry of Environment’s delay in approving the license application in order to expand the operation of the project, which has already taken more than 300 days (when it generally does not take more than 100 days), through which they seek to make The process is sustainable from an economic point of view.
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