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What's going on in Colombia?

(photo source: notiagen)

Colombia was the new darling of mining investors starting in the middle of the last decade. During eight years under the former president, Alvaro Uribe, the area granted for mining and oil concessions tripled to an estimated 22 million hectares. In the gold sector, companies like Anglogold Ashanti led the investor charge. World-class multi-million ounce discoveries like Anglo's la Colosa were made. However as these project advanced closer to being built into producing mines, social opposition mounted due to concerns over environmental impacts. None of these new discoveries have actually been permitted to build producing mines.

In July of this year people in Cajamarca, a farming town in central Colombia voted overwhelmingly against Anglo’s La Colosa gold mine in a plebiscite. The major concerns cited by the opposition movement to the project are water-related. Opponents claim the large volume of water needed would affect downstream water users, they also state concerns over the use of toxins like cyanide used for ore processing. The project has been affected by numerous roadblocks and is the subject of ongoing dispute between local and national authorities over permitting.

Elsewhere in Colombia Eco Oro's Angostura project has also been stalled over environmental impact concerns. The project's Environmental Impact Assessment was submitted in December 2009 but was rejected given public concern that it would affect the Santurban Paramo (mountain wetland area). The company responded with a new mine plan in an effort to avoid impacting the paramo, a protected area by law. The Colombian Environment Ministry has undertaken to define the Santurban paramo area, but the process has been slow. Due to the ongoing delays Eco Oro announced increased cost cutting measures on the project in July.

These are but two of many mining projects that face stiff social opposition in Colombia. These cases are similar to many I’ve seen in the Andean region. Seemingly unwilling to take the social and political fallout of green-lighting a project with considerable opposition and also reticent to lose face in the investor community, the government just puts off the necessary approvals. Thus the conundrum is either passed off to the next government, or the company runs out of patience or financial resources.

There appears to be no obvious solution for the industry and those that seek to promote it within government. Are these companies not able to put effective environmental management plans in place, or are they just losing the battle for local hearts and minds? I’d like to hear your thoughts on what more mining’s proponents should be doing.

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