Colombia's new Minminas head to face a series of challenges in the mining sector

Colombian President Juan Manuel Santos has appointed Amilkar Acosta Medina as new mines and energy minister as part of a cabinet reshuffle. Acosta replaces Federico Renjifo who held the position since September last year. Acosta will not be faced with an easy task as the government seeks to implement a series of reforms in the mining sector. One of his major challenges will be to ensure the successful formalization of the country's so-called traditional miners, many of whom operate gold mines in Antioquia department. Colombia's small or traditional miners operate outside the law. In a 2010-11 census on mining activity in Colombia, Minminas registered 14,357 mining production units in Colombia of which 63% or over 9,000 do not have mining titles. Of the total number of mining operations in the country, 75.7% do not have environmental authorization and 90.5% do not have environmental permits. Colombian small miners confederation Conalminercol signed an agreementas recently as September 2 with the government to end a strike that started on July 17. Acosta will also be called on to resolve environmental issues that are holding up the development of projects such as South African AngloGold Ashanti's (NYSE: AU) La Colosa in Tolima department and Eco Oro's (TSX: EOM) Angostura project in Santander. The new head of Minminas also faces trouble in the coal mining segment, which has been hit by a series of strikes and disruptions this year. A 26-day strike at Cerrejón, the country's largest coal producer, combined with a temporary ban on Drummond's shipments and another on rail operator Fenoco which takes coal to the coast, plus problems at Colombian Natural Resources' La Francia mine prompted the national mining agency ( ANM) to lower coal production forecasts earlier this year to 94Mt from 98Mt. The impact of a more recent strikeat Drummond, which ended on Friday, has yet to be estimated. Coal production fell 13.4% in H1 to 40.5Mt. Colombia is the largest coal producer in Latin America with output of 89.2Mt in 2012. The new head of Minminas studied economy at the Universidad de Antioquia in Medellín. Upon graduating, he became a councilman of the city from 1974-76. In 1990, Acosta was deputy mines and energy minister for one year. The new minister will "work in the creation of a development model that combines the needs of the mining sector with those of agriculture and the environment," President Santos said. "This model must ensure harmony between the development of private initiatives and social and environmental responsibility."