Mining Companies Reconsider Colombia

Published by MAC on 2006-10-05
Source: Foreign Direct Investment magazine (FT)

Mining companies reconsider Colombia

Foreign Direct Investment magazine (FT)

5th October 2006

As the internal security situation improves in Colombia, foreign companies are returning, with mining concerns leading the expedition.

Companies such as Rio Tinto, Cambridge Minerals Resources and Greystar were on hand in Medellin in late September for the second annual International Mining Fair and Conference.

Violence scared off all but the largest coal companies, and for the better part of 40 years the remote areas with the most mining potential were veritable no-go zones.

But the security programme of president Alvaro Uribe, re-elected in May, has made headway in restoring government authority over patches of the country formerly threatened by guerrilla and paramilitary groups.

Mr Uribe attended the event, taking questions from mining professionals and local officials in the audience.

"We are trying to improve the institutional framework [for the mining sector]," he said. The president said he was asking the minister of mining and energy to present an amended mining code to Congress in mid-March.

The packed room, and feedback from multinational attendees, suggests the industry is ready to give Colombia a second look.

Preston Chiaro, chief executive, energy, at Rio Tinto, who travelled from London, told fDi: "We're doing exploration [in Colombia] for a variety of products."

"There are challenges here, but they are challenges we have faced in other parts of the world that we have managed successfully."

The government, he said, had been "extra supportive" of Rio Tinto's activities in the country: "I haven't found a more receptive government anywhere in the world. We have had good political support from the local all the way up to the national government.

"We would have no problem doing business in Colombia if we found deposits of significant size."

UK-based Cambridge Minerals Resources formally launched operations in Colombia eight months ago and has taken over five small but high-grade mines with three more under negotiation. "Colombia is phenomenally well endowed with minerals," said Colin Andrew, managing director.

"There are not many countries where there has not been major exploration of minerals for the past 40 years," he continued.

"Colombia could be the last gold rush on the planet."