Colombia to create national mining company, 2022 royalties soar

Colombia’s president Gustavo Petro. (Image by Petro’s press team, Flickr).

Colombia is preparing to launch a national mining company, the president of the government’sNational Mining Agency (ANM) said on Wednesday, adding that coal mining royalties during the year had more than doubled.

The government of President Gustavo Petro has pledged to reform the mining sector, ruling out more licenses for large-scale open-pit coal mines as it focuses on minerals that are important for the energy transition, such as copper.

Part of that effort will include launching a new state-owned mining company, starting with an agreement to bring two international gold trading companies under control of the government, ANM President Alvaro Pardo told journalists during a press conference in Colombia’s capital Bogota.

The two companies are currently held by the Special Assets Society (SAE), a fund which manages assets seized from criminals and illegal groups to compensate victims of Colombia’s internal armed conflict.

“These two international trading companies are passing over to the mining authority and the idea is to embed them in the national mining company,” Pardo said.

The Ministry of Mines and Energy could sign a memorandum of understanding with the SAE as soon as Monday, Pardo added.

The company will sell “green gold” to European countries, Pardo said, with the national mining company only buying gold from miners who produce the yellow metal without using mercury or cyanide, Pardo said.

The government-run company will put a dent in Colombia’s illegal gold trade, Pardo said, offering considerably higher prices to the country’s informal miners than those currently buying it.

According to the United Nations Office on Drugs and Crime (UNODC), 65% of Colombia’s alluvial gold production last year was illegal.

The ANM has extended the contract for South32’s Cerro Matoso ferro-nickel mining project by 15 years to 2044, it said in a separate statement.

Royalties from coal mining soared in the first 11 months of this year despite a substantial drop in production, mainly due to higher prices and the stronger dollar, Pardo said.

Royalties from coal rose to 4.1 trillion pesos ($850.9 million) as of Nov. 30, up from 1.9 trillion pesos in 2021, he said.

Total mining royalties as of Nov. 30 stood at 4.8 trillion pesos, he added.

($1 = 4,818.32 Colombian pesos)

(By Oliver Griffin; Editing by Diane Craft)

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