OBG talks to Beatriz Uribe, President, Mineros

Interview: Beatriz Uribe

How frequently are exploration delays the result of instability and security issues?

BEATRIZ URIBE: Mining development has been stunted for many years due to security problems. The conflict prevented miners from entering rural areas for 40 years due to the high risk for investors and explorers, particularly in the case of foreigners. Since former President Álvaro Uribe’s administration, there has been a notable improvement in security, which spurred investment and caused the number of requests for mining licences to soar. This overwhelmed the mining authority, which failed to respond appropriately to the reality that Colombia is a country with high mining potential. A decade later, the mining administration has become more structurally adequate and arguably even well designed, although, functionally speaking, it is still practically inoperative. Only now is the government starting to properly map the country’s mining areas. It is well known that the state still needs to resolve the issue of overdue licences. Mineros, for example, has been waiting for more than 18 months for the resolution of multiple requests. The good news is that Colombia has now traced the path that can lead to positive development of its mining sector. Administrative backlogs should no longer be a concern for the medium term.

Colombia aims to almost double gold production by 2019. To what extent is this a feasible goal?

URIBE: It will be difficult since no new gold production projects have begun in the past few years. In addition, it will require a much greater consensus among government institutions, specifically the Ministry of Mines and Energy, the Ministry of Environment and Sustainable Development, and the Ministry of Agriculture and Rural Development. Consensus among other stakeholders will also be necessary, as all parties must collaborate to boost gold mining and production. Among the leading projects, La Colosa has no chance of producing a considerable amount of gold in less than 10 years, the Gramalote mine should begin production by 2016 and the Buriticá mine has had difficulties but is progressing. Around 80% of Colombian gold comes from informal mining that should be replaced by large-scale mining where possible.

In what ways do security issues have an impact on the revenues of larger companies?

URIBE: In general, there has been a surge in the sense of insecurity in the past two years. The Colombian army has played an important role in supporting the mining and energy sectors, and recently the security forces have been able to restore some balance. However, certain high-interest areas cannot be reviewed or explored due to security risks. Southern Bolívar is a perfect example of an area with high gold potential where the security situation restricts operations. A few Canadian firms have established themselves in the area, but 60% of their costs go toward logistics and security, often negating the viability of such projects.

To what extent is it possible to integrate informal miners into more formal operations?

URIBE: The principal issue is that informal mining has not been clearly distinguished from criminal mining, so the same scourge is applied to both equally. Informal miners, or artisanal miners, are small producers by definition and usually cause adverse effects to the environment due to their use of rudimentary and inefficient methods. The only solution is to offer them support and assistance so they can associate with formal operators and achieve better practices.

Private industry has offered its support to the Ministry of Mines and Energy to help integrate artisanal miners into more formal operations. Operators already attempt to work with informal miners as we encounter them within our land concessions. The ideal is to partner legally with them, to facilitate the transfer of our mining expertise to them and to educate them on how to respect the environment. As long as gold prices are high, artisanal mining will be very challenging to end.