More than half a century of conflict between the Colombian government and the FARC guerrilla group created decades of stalled growth in all sectors of the South American nation.
This included the mining sector, which was considered a no-go zone for major global mining companies for many years.
While mining, both legal and illegal, continued during the FARC years from 1964 until the “Agreement for a Stable and Lasting Peace” was reached in November of 2016, large-scale mining for precious and base metals largely shut down.
Significantly, the country missed out on the benefits of the modern exploration technologies that miners in neighbouring countries utilized to make a number of world-class discoveries.
However, the veil covering Colombia’s mineral riches is now being lifted, with a host of global miners now in place and a swarm of juniors obtaining exciting drilling success.
Significant new players in the country include Newcrest Mining (ASX: NCM), AngloGold Ashanti (ASX: AGG) and Agnico Eagle Mines (ASX: AEM).
However, while the mining sector currently makes 2.4% of Colombia’s gross domestic product, it is estimated that 80% of the country’s mining territory is unexplored, providing greater opportunities for investments.
This was reflected earlier this year when the Fraser Institute rated Colombia first on the Investment Attractiveness Index amongst countries in the Latin America and Caribbean Basins.
New concessions granted
With mining activity currently conducted in only around 3% of national territory and operations ongoing in just 2.1%, Colombia has around 40 gold and copper projects in the pipeline, most of them in the exploration stage.
Due to the absence of major projects in the past 15 years, many large mining projects are now in the feasibility phase, providing hope that there will be an increase in market size and new opportunities for local workers in the coming years.
The government of President Iván Duque is certainly looking to boost the number of projects in the sector, and the nation’s mining agency (ANM) recently granted 13 new mining concessions in the Atlántico and Bolívar departments.
Of the concessions granted, nine are for medium-scale projects and four for small mining operations.
The concessions are for the exploration of copper, gold, silver, platinum, and construction materials in the municipalities of Sabanalarga, Repelón, Luruaco, and Santo Tomás.
Recent studies suggest Colombia’s mining sector is expected to recover significantly in 2021, propelled by greater production of coal, gold and nickel and direct foreign investment, which is expected to almost triple to US$2.7B, according to the Colombian Mining Association (ACM).
“We expect the mining sector will finish this year recovering some 15%, a recovery marked by better coal production … and boosted by new gold and copper projects,” ACM president, Juan Camilo Narino, said.
Recent drilling successes
A number of TSX-listed juniors have reported recent precious metals exploration success.
02Gold Inc. (TSXV: OTGO) has successfully confirmed the mineralized system of the main Aurora vein at depth at its property in Colombia.
The company’s drill programme is soon expected to expand to its nearby brownfields of Aparecida and Quintanillo, where ongoing exploration work has identified at least nine separate veins, one with a projected extension of 1.2km.
Meanwhile, Max Resource Corp (TSXV: MXR) has reported high-grade hits, including 14.8% copper and 132 g/t silver outcrop over 1.5m x 0.8m panel, while expanding the URU zone from 12km2 to over 48km2 within its wholly-owned CESAR project in NE Colombia.
Eighteen rock samples collected over widths ranging from 1.0 to 10.0m returned values in excess of 2.0% copper. Thirty-two returned values greater than 1.0% copper.
Elsewhere, Outcrop Silver & Gold Corporation (TSXV: OCG) has discovered seven high-grade shoots at the Santa Ana Project in Tolima.
Los Cerros Ltd (ASX: LCL) has been a star of the Australian market in the last 18 months, with a string of near surface gold porphyry discoveries a Tesorito, part of the company’s 100% owned Quinchia Gold Project in Risaralda.
Recent results are part of a large, systematic programme to define the boundaries of the northern, eastern, and southern envelopes of gold mineralization which has already delivered multiple spectacular gold intercepts from surface.
Management says the latest results have continued to demonstrate a further expansion of the high-grade shallow gold zone at Tesorito South.
Copper support requested
While gold exploration and production is on the rise, the ACM president has urged the government to do more to support copper exploitation.
It is estimated that Colombia has 2.87B pounds of probable copper reserves, 6.06B pounds of indicated copper reserves and 8.44B pounds of inferred reserves.
However, the country only mines around 10,000 metric tonnes per year of copper from one mine, Canada’s Atico Mining’s (TSXV: ATY) El Roble mine in Choco department. Several other projects await environmental licenses. The US$1.4B Quebradona project, controlled by South Africa’s AngloGold Ashanti (JSE: ANG), is expected to start production in 2026.
“The world that we all want for our children and for those who follow us needs more minerals,” Mr Camilo Narino recently declared.
“The electric mobility that we all dream of, the more efficient and emission-free public transport that we all deserve and, above all, the illusion of living in countries that generate energy in a more diversified and clean way, requires many more mines in Colombia.
“Many affirm that the history of humanity, its progress, development and the many benefits that as a society we have achieved for millions of people can only be understood when they are linked to the development of mining activity. Well, looking to the future, that will be a reality without middle ground.
“Just to give examples that illustrate the above, the technicians of the automotive industry affirm that an electric car needs 15kg of copper, in addition to lithium, cobalt, and nickel; key metals to providing autonomy. A wind turbine can use from 400kg to four tonnes of copper, depending on the technology, and a solar panel is made up of silicon, copper, molybdenum, beryllium, germanium, gallium, and indium.
“The way we are conducting public discussion today in relation to the present and future of the mining industry is going to lead us to only one place: to failure and division.”
With Colombia’s guerrilla conflicts seemingly behind it, the country’s vastly underexplored mineral riches are sure to attract growing international interest.