The Colombian mining rally begins to attract investment

The Colombian mining rally begins to attract investment

The current exchange rate, the elimination of one shift working in China and the increase in production gave a new air to the mining sector of the country in recent months. You cannot speak of bonanza, but it is a good time for some minerals, just when other key sectors of the economy start to stagnate, such as trade and infrastructure. Last year, it was particularly good for the commodities in the world, because its prices were increased by 26%, largely because the price of a barrel of crude recovered 44%, followed by 34% of the metals. At the local level, mining was the second sector with more growth in 2016, with 4.7%, and close the first, which was financial establishments, with 5%.

In the specific case of coal, the President of the mining National Agency (ANM), Silvana Beatriz Habib Daza, explained that “the mining sector in Colombia 2016 finished in reverse to how it began”. The official said that the beginning of the year was difficult in terms of prices, but ended with a major rebound, especially in coal, which surpassed the US$ 89 per tonne. In terms of production, Habib explained that the country ended the year with a record number, passing the barrier of the 90 million tons of coal, and increasing the production of this mineral 5.8% from 2015.

The recovery of  coal production in areas different to Guajira and Cesar departments is also notorious. Cundinamarca, Norte de Santander and Boyaca managed to expand their production in spite of the difficulties in transport and logistics.

“Also in gold we grew 4%, nickel 1%, in emeralds 14% and 26% in construction materials. After those results we are very optimistic about 2017, a year in which it will show the revival of the sector,”she said. Despite these good figures, Habib Daza warns that there are still important challenges, legal instability and social unrest in some regions as well as illicit exploitation.

Santiago Angel, President of the Colombian Association of mining (ACM), ratifies the good moment of the sector, but warns that it is necessary to solve the problems that remain, such as the delay in the issuance of the environmental permits, as well as the decisions of the higher courts that guarantee the impossibility of making mining in some municipalities.

Angel said that this situation is doing ‘metastasis’ in other towns and regions and that it is a matter which must be resolved in the short term to not affect new investments or the arrival of more companies to the country.

Some people in the sector have also complained that mining has been out of some incentives established by the tax reform. In particular, one that allows you to do constructions in exchange for tax; such a move would have served so many mining companies do social investment in areas where they have influence, which in many cases are regions affected by conflict and violence.

The ANM announced that during the mining trade show in Toronto (Canada) held a few days ago met with interest in the country from 3 of the 10 of the world‘s largest mining companies. “We met among others with companies Newmont (the second in the world), Newcrest (the sixth in the world) and Agnico Mines gold (10), all interested in coming and investing in Colombia“, anticipated Habib.

The news is good, but it is necessary to make adjustments to not scare away those interested. “After the Mining Congress of Toronto the perception of a moderate optimism in the sector, mostly because the companies are returning to consider projects, but it is necessary to put the house in order,” said the President of Mineros, Andrés Restrepo to Dinero.

Precisely gold is a bearer of good news activity at the local level with the approval of the environmental licenses for two gold mining projects on a large scale and two medium scale. “These projects are expected to substantially increase gold production in the coming years,” said the ANM. It‘s projects Buritica, of Continental Gold, and Gramalote, Anglo Gold Ashanti, and the gold projects to medium scale San Ramon, Red Eagle Mining, and Cisneros, of Antioquia Gold.

Meanwhile, Mineros SA projected a gold production of 200,000 ounces this year, 90,000 of which would be at its mine in Nicaragua. “In the past two years the prices (in pesos) have recorded record highs. But it will only be a good year for the industry when reversing the numbers of illegal mining,”said Restrepo.

It is also necessary to explore new productions, as in the case of copper. According to some international projections, a shortage of this product will be in the year 2020.“And Colombia has very good chances of finding this mineral and exploit it efficiently,” said Angel, ACM

Originally posted in Dinero,

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