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A study by the National University entitled “Gold production in Colombia: promising but with challenges to overcome” looks at the complex scenario that mining is currently going through, especially that of this precious metal.
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To understand how this business works, the publication states, we must start from the fact that Colombia has mining potential, largely exploited by small-scale informal miners.
In addition, “many of the reasons for the adoption of mining laws and regulations in Colombia were based on promoting investment in the conventional mining sector and attracting the largest inflow of foreign direct investment, other than artisanal and small-scale mining,” it says Article.
Overall, gold mining has played an important role in the country’s economy. In fact, according to the Mining Subdirectorate of the Mining and Energy Planning Unit (Upme), in 2022 a production of 42.14 tons of gold was reported, mostly contributed by Antioquia, Chocó and Bolívar.
(See: Five in 10 people consider mining an illegal industry.)
The collection of royalties related to gold extraction amounted to $69.46 million in 2022, according to Upme.
According to the National University, “until recently, the majority of Colombia’s gold production came from alluvial mining, which accounted for around 80% of the country’s total production. However, underground mining has become increasingly important in national production.”
According to the National Mining Agency (ANM), the most representative underground projects in gold production were the following:
1. Buriticá de Zijin from Continental Gold with 246,886 ounces.
2. Segovia and Marmato from Aris Gold Corporation with 235,379 ounces.
3. Cisneros, from Antioquia Gold, with 48,955 ounces.
4. El Catfish and Nechi, from Soma Gold Corp, at 23,115 ounces.
5. El Roble from Atico Mining Corporation at approximately 11,254 ounces.
(See: These are the five axes included in the Mining Law Project).
The big challenge in the country
Gold mining.
According to the National University article, there are numerous mining activities in various areas in the country, mostly developed on a small scale. Therefore, conventional mining must coexist with these projects, creating a conflict in which “undesirable actors intrude.” They divert attention and lead to the loss of the purpose of decent and legal work in the mining regions. They bring with them the problems of illegal – and in some cases criminal – activities, thus enabling the emergence of economic and environmental impairments and social conditions of the regions and the nation.
In other words, the parties look for sectors for gold extraction and ultimately compete for land. On the one hand, “mining owners insist on the exclusivity of their concessions and legally acquired rights and therefore view small-scale miners as ‘invaders’; They in turn view their operating area as their rights.” “traditional methods of working the land and extracting the precious metal.”
Given this crossroads and recurring disputes, the government “has expended resources to formalize artisanal and small-scale miners, but has neglected to plan, structure and set rules of the game that will enable miners to develop a profitable business model.” Step to formality,” it continues.
(See: Why the government ruled out reforming the mining law).
Other issues on the radar
Illegal exploitation, which causes “significant ecological, social and economic damage,” is proving to be a challenge.
The research also points out that the reason why illegal exploitation continues for a long period of time is “the lack of regulation, control and supervision in some areas”.
According to the Colombian Mining Association (ACM), 57% of national gold production came from formal operations, showing that gold mining activities in the country are still more than 40% informal.
Other challenges the government must address in terms of exploitation include deforestation, pollution and social impacts.
What awaits mining in Colombia?
As for future prospects, the National University study said: “Gold mining has peculiarities that make it risky, long-term and subject to high uncertainty, and which also require the availability of capital to make large-scale investments,” it said in article.
(See: Mining law would be presented in the second semester: This is proposed.)
In addition, it is noted that gold production depends on:
1. The effectiveness of regulatory measures and law enforcement.
2. Efforts to promote sustainable practices as “the dynamics of the international gold market and environmental standards are likely to influence the future direction of the mining sector in the country.”
SOFÍA DÍAZ RICO
Briefcase
#Challenges #faced