Colombia: Mining companies want to invest US$7,6 billion if there are guarantees

Colombia: Mining companies want to invest US$7,6 billion if there are guarantees

A better performance of the country’s mining activity, as a result of the recovery of coal, gold and nickel prices mainly, led companies in the sector to change the investment landscape for the next five years.

After falling to negative levels the capital flows in this activity during 2016, implying a contraction of 120% annually, for this year the forecast is that they enter fresh resources for more than $US1,5 billion and, for the next five years, the expected figure exceeds $US 7,6 billion.

This is the amount projected by the Colombian Association of Mining (ACM), which this Thursday carries out its annual congress in Cartagena and whose directors and affiliates made it known to President Juan Manuel Santos in a meeting held on 27 April.

The President of the Guild, Santiago Ángel Urdinola, warns, however, that the intention to inject this large sum is linked to the conditions necessary for the operation, that is to say, at the level of environment and legal and regulatory aspects.

“This money is not assured if we do not see an agenda that guarantees the problems we have today,” he said.

The new estimated resources will be concentrated on capital investments to increase production, with the aim of leveraging that the price conditions on world markets have improved.

For example, Red Eagle is completing the construction and assembly phase of the San Ramón gold mine in Santa Rosa de Bears (Antioquia), and Cerro Matoso is injecting important resources to the expansion of the La Esmeralda Reservoir.

As recalled, through this project the firm plans to increase the production of ferronickel in 5,000 tonnes per annum between 2018 and 2020.

And, according to the manager, in addition to the Gramalote gold project of AngloGold Ashanti in San Roque, Antioquia, last year the coal industries had record production and among their plans to continue to inject resources to the investment of new cuts, such as La Puente, Cerrejón.

“The market gives us some signs, but what happens is that the environment gives us others,” adds the trade union leader.

And while last year the mining sector grew 4.7 percent and estimates its GDP to advance this year by 5 percent, what would imply an increase of 20% in their exports, their representatives also alerted by the legal uncertainty and by the unusual rise in the events or blockades to their activity.

Last year, according to ACM statistics, there were 338 reported events, implying an increase of 42 percent in this phenomenon compared to 2015, when 238 cases were recorded, most of them on the railways. The striking thing is that the trend continues this year, although only 26 cases were presented in 2013.

The sector estimates that, as a result of this situation, between 2013 and 2016, the loss of profits approached the trillion pesos.

“The sector does not serve as a year’s regulatory agenda because money will flow to other countries.” “We need action now,” stressed President Urdinola.

To rush the Pace
In the hope that there will be substantive solutions in relation to legal certainty, the mining companies urged the government to start the instruments related to the recent tax reform, that is to say, the Tax refund certificate (CERT) and the tax works scheme, because after giving the Lapo in the law , employers are now suffering from the rules of Procedure.


The cert is a useful resource to attract new investment to Colombia, while the second is an element to return to the sector with the territories where the mining activity is made.


“For an explorer it may be better the first, but for a producer can be the second, as the Explorer has no income to cross.” The first is for new projects and the second, for more mature investment, “stresses the president of the ANM.


And although all of the operating environment issues are complex (popular queries,) prior consultations and land restitution processes), today the great mining industry warns that the most difficult to manage are the popular consultations, because it is a cliché that has all the historical ills of the country, summarized in the bid of the regions against the nation.


Higher export upturn


As the country’s exports contracted 13 per cent last year, the mining and quarrying sector advanced 8 percent, which helped, after the financial industry, was the second largest GDP growth.


This situation and the conditions of best prices lead to the Colombian Association of Mining to Gamble because, this year, mining exports have a growth of 20% and that the activity grows at levels of 5%, when for the whole country the Bank of the Republic sees a GDP advancing at a rate of 1.8 percent.


According to the Colombian Mining Association, most lines are rising, even that of emeralds, in which production rose 14 percent.

Originally posted in El Tiempo.

Original Article: 👉 Here

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