Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Colombia’s mining industry is ready to contribute to the energy transition but needs coherent messaging from the government to create the certainty needed to support investment, the boss of the Colombian Mining Association (ACM) said on Monday.
Leftist President Gustavo Petro has made it his goal to wean the South American nation off its dependence on oil and coal exports – which he decried as poisons during last year’s election – and has pledged to block open pit mining where communities do not want it.
However, the industry needs assurances of stability if mining exploration is to go ahead, as well as security in the regions where projects are located, ACM President Juan Camilo Narino said in an interview.
“The field of exploration … needs clear messages from the government, firstly conveying that this is a government that wants this investment and secondly (it) needs adequate security conditions,” Narino said, citing attacks on mining companies and protests that block operations.
The Ministry of Mines and Energy did not immediately respond to requests for comment.
Mining companies will this year pay some 15.9 trillion pesos ($4 billion) in taxes and royalties in Colombia, Narino said, adding that the government must consider how it will use this income to fund its policies of improving access to healthcare and reducing inequality.
“(The government) needs to reflect deeply on how to build a competitive framework. If not, the investment will go elsewhere,” Narino said, listing countries like Canada, Chile and Peru, among others.
While Colombia continues to depend on coal exports for income, it must do more to foster an environment where minerals needed for the energy transition can be produced, Narino said.
Colombia currently has one copper project producing 10,000 metric tons per year, he said, adding that a number of other projects are in important phases of exploration.
“These projects are the hope for Colombian copper, projects that must be supported with the conditions created for them to keep exploring,” Narino said.
($1 = 3,948.7 Colombian pesos)
(By Luis Jaime Acosta and Oliver Griffin; Editing by Paul Simao)
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