06/03/2023

Security concerns, coupled with investment uncertainty due to the high tax burden and the absence of clear rules of the game in legal regulations have caused the mining companies Agnico Eagle, Fortescue Metals, Barrick Gold, Royal Road Minerals, Iam Gold and Touchstone Gold to stop. operation, and possibly to turn it off.

It was learned last Thursday that the first four companies on the list made a determination to halt their exploration duties and were considering leaving the national territory if conditions did not change.

This was pointed out by Juan Camilo Nariño, executive president of the Colombian Mining Association, who emphasized that to matters of public order, “current country uncertainty in relation to investment” was added, to make the decision to close operations and leave Colombia.

Union leaders, who have refrained from disclosing the names of 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, and because of the cessation of these activities they stopped investing in Colombia. between US$35 million and US$50 million.

In addition, this situation became known a few days after the public order problems faced by the mining company Zijin Continental in the Buriticá gold project, and Mineros with its work in El Bagre, both in Antioquia, and which shows that they are not the only ones who have problems developing activity.

Mining company that stopped

Of the four mining companies that anchored operations last year, Agnico Eagle, Fortescue Metals and Barrick Gold do not have the right to develop in Colombia, sources from the National Mining Agency confirmed, because their intention was to establish cooperate with that partner if they have it.

In doing so, the four companies reduced or froze investments stemming from complex relationships with communities and legal constraints on mining regulations.

“Added to the above, this sector must live with government policies that touch them at the fiscal and operational levels. There is hope about the proposed New Mining Law, ban on open pit mining, suspension of mining certificates, protection policies for mining without rights, and new environmental requirements that will be put in place to obtain permits.” , says Inés Elvira Vespa, partner at Holland & Knight.

Of the four mining companies, Agnico Eagle is known in the mining sector for developing 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 finance exploration operations in Colombia and Nicaragua.

Agnico, based in Toronto (Canada), currently operates in the country and in Mexico, United States, Finland and Sweden.

Another mining company set to leave the country is Fortescue Metals, headquartered in Perth (Australia) and arriving in Colombia in 2019 to explore and produce copper.

Since then, it has submitted 64 applications for exploration concessions with the National Mining Agency in areas with potential for copper and gold, in cities such as Algeciras, Gigante, Baraya, Hobo or Tello, in Huila, and Puerto Asís, Orito and Villagarzón, in Putumayo. He also asked permission to study at Nariño.

The investment for these tasks is up to $6,000 million. However, moves by environmental groups began to slow down operations, and with the arrival of the pandemic hitting many mining companies, he had no choice but to start returning permits.

That same year, Canadian, Toronto-based Barrick Gold Corporation, considered by analysts to be a multinational company dedicated to the world’s largest gold production, also landed.

Its portfolio comprises the development of 23 mining complexes in the US, Dominican Republic, Canada, Australia, Argentina, Chile, Peru, New Guinea and Zambia. Similarly, half of the extraction volume is derived from assignments in the US and Canada, 25% from Australia, 19% from South America, and 6% from Africa.

Barrick currently carries out various exploration projects in more than 15 countries. Unlike the other three, this company is no longer in Colombia.

slow down operations

British mining company Royal Road Minerals, which is about to phase out its investment in Colombia, is well-referred to on its map of extractive operations in the country.

Its most recent movement was registered in June 2021 when it was announced via a statement that it had received approval from the authorities to develop the Güíntar, Niverengo and Margaritas projects in Anzá (Antioquia).

“The integration and interpretation of the new geological information across the project has combined to define several exciting new targets in depth,” said Tim Coughlin, CEO of Royal Road Minerals, then.

The mining company headquartered in London (United Kingdom) and operating in Saudi Arabia and Argentina has conveyed to the country’s mining sector that for the time being they are still in Colombia, moreover they already have property rights, but it has been clarified. that they will proceed with a great deal of vigilance and caution in making future decisions.

The British miner is also concentrating his exploration efforts on the La Golondrina and La Redención projects in La Llanada (Nariño).

The other two are out

The companies Iam Gold Corporation and Touchstone Gold were added to the list of four mining companies that have ceased operations.

In the former case, apart from economic problems and bankruptcy at the internal level, it was added that the operations they had developed in Titiribí (Antioquia) were stopped by the City Council Agreement which prohibited mining duties in the area. .

The mining complex for medium and industrial scale gold production started work in 2010, but is currently in the process of being closed.

For a mining company based in Toronto (Canada), the management of mining regulations in Colombia is complex and accommodated by a municipal entity, which administers the Agreement to stop extractive operations before the council, as well as the Constitutional Court with a 095 sentence of 2019 prohibited.

Similarly, Iam Gold emphasizes that although the environmental guidelines in the country are set by the Ministry of Environment, regional autonomous companies follow the guidelines of the mayor or governor, and this is detrimental to the normal development of mining operations.

A similar situation is experienced by the Touchstone Gold mining company, which is dedicated to gold and silver production in Segovia (Antioquia) and whose administration has not ruled out closing operations.

The reason that made them decide was the delay on the part of the Ministry of Environment to approve the application for a permit to expand the operation of the project, which had already taken more than 300 days (generally it did not take more than 100 days), and with that they were trying to make the operation sustainable from economic point of view.