On the surface, it could appear that Colombia's mining industry is stuck in a rut. Mining GDP grew 48% from 2004-12, but has been flat since then. FDI flows into the mines and quarries sector peaked in 2009 and have since fallen by half. The sector continues to operate under the 2001 mining code despite great efforts toward a reform in 2010, which ended up rejected by the nation's constitutional court, and confusion remains around protected areas. A new system for awarding high-potential concessions via bidding process has yet to start.

The coal sector has been unable to achieve its long-projected 100 million tonnes per year (Mt/y) production goal and gold output is only slightly higher than it was five years ago despite millions of new ounces discovered during the now-quieted exploration boom that occurred when gold prices were on the rise.

Unlicensed mining activity, mainly gold-focused, continues to occur across Colombia and particularly in the departments of Antioquia, Chocó, Nariño, Cauca, Bolívar and Caldas despite efforts to crack down and formalize, their operations often clashing with or overlapping concessions legitimately held by others. Particularly problematic are those operations run by armed groups, which present not just social and tenure risks but a physical security risk.

The courts are becoming active in making decisions that affect mining projects as society becomes more active in taking miners to court. The industry in general in Colombia, and the government, are struggling to provide the level of information, transparency and dialogue that citizens across Latin America and the world increasingly demand.

And mining is simply no longer a top priority for Colombia's leaders. At the start of his first presidential period in 2010, Juan Manuel Santos declared mining to be among the "locomotives" of Colombia's development and launched a series of initiatives designed to leverage Colombia's blossoming international image as a top exploration destination with an improved legal and institutional framework. Today, a year into Santos' second term, other issues are more pressing, such as the peace talks with armed paramilitary groups, infrastructure projects and advancing the oil and agriculture industries.

Terrain near Buriticá project. Credit: Continental Gold

To top it all off, FDI flows to Colombia and Latin America in general have shrunk significantly along with minerals prices and the changing world economic landscape, and the global mining industry slowdown has erased much of the interest of foreign venture capital in Colombia.

But peel back that layer, and baby steps start to emerge. The ministry of environment and sustainable development announced in late 2014 the final coordinates of the Santurbán páramo mining exclusion zone after years of study, the first step in providing clarity for miners in the area. The San Ramón gold project in Antioquia received final approval in 2015, becoming the first modern, corporate-run metallic mining project to receive permits in three decades.

The government has defined a list of projects considered to be of strategic national interest and authorities have begun to focus on supporting the advance of those projects. Mining and environmental authorities are working together better than ever, and there is optimism among miners in the country regarding policy advances and legal stability.

The price panorama for Colombia's main mining products, coal, gold and nickel, is not particularly promising for the coming years, meaning operators and would-be project developers face market as well as country challenges and Colombia will struggle to retain investors, especially in the gold exploration sector. However, the low price environment also offers a relatively quiet period in which to continue perfecting the country's legal framework and advance community and local government relations, and companies willing and able to stick it out are likely to, eventually, find success.

Figure: Colombian National and Mining Industry GDP


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