Exploring Mining Opportunities? The answer is Colombia Latin America Down Under
MarĂa Constanza GarcĂa President Sydney - May 29, 2013
Colombia is on the radar of mining investorsâ€Ś
Colombia is a major destination for investment Rated 4th country in Latin America for ease of doing business (World Bank, 2013)
Rated 7th best investment destination in the world and 4th in Latin America (Behre Dolbear Group, 2012) In mining potential: 21st in the world and 2nd in Latin America (Fraser Institute, 2013)
There is a positive business environment in Colombia Doing Business ranking 2007-2012* (movement of positions in the ranking) Colombia
Investor protection indicator, 2012 (0 to 10) 37
Argentina -12 Venezuela -13
Costa Rica-16 -20
Source: World Bank, Doing Bussines Report 2007 - 2012. *Positive values show improvement in business environment
Source: World Bank, Doing Business 2012: in a more transparent world
Colombia is emerging as an exploration hotspot Top destinations for exploration investment
25% of the global exploration budget
Countries that attract investment in the mining sector
Source: (Graph 1) Corporate Exploration Strategies 2012, Economic Metals Group- MEG. (Graph 2) Survey of mining companies 2011/2012 (25 countries) by the Behre Dolbear Group.
• Coal - Ferronickel • Coal • Coal • Gold • Gold • Coal • Coal - Gold • Coal • Steel - Coal • Gold • Gold • Building materials • Building materials
Country of origin
• CerrejónCerromatoso • Cerrejón • Cerrejón • Sorotama • Anglo Gold Ashanti • Drummond • AUX • Prodeco • Paz del Rio • Gramalote • Gran ColombiaGold • Holcim • CEMEX
• BHP Billiton • Anglo American • Xstrata/Glencore • Barrick Gold • Anglo Gold Ashanti • Drummond • EBX • Xstrata/Glencore • Votorantium Group • B2 Gold • Gran Colombia Gold • Holcim • CEMEX
Subsidiary in Colombia
Top foreign mining companies with investments in Colombia
• Australia • South Africa • Switzerland • Canada • South Africa • United States • Brazil • Switzerland • Brazil • Canada • Canada • Switzerland • Mexico
Source: National Mining Agency
For every US$ invested in the mining sector, US$2.44 is generated in additional economic activity. The mining sector purchases goods and services from other sectors: Coal
3,000.0 2,000.0 1,000.0 0.0
Source: DANE – Calculated by National Mining Agency
• • • • • • • • • • • • • •
Construction of Civil Works and Equipment Leases Transportation Fuel Equipment Maintenance Financial Services Chemical Products Utilities M&E Accommodation Food Supply Clothing Paper Real Estate Services Sports and Recreation Telecoms
Investment in Colombian mining has a broad impact on the national economy
An average of 28 jobs are generated by every SME mining title: 40% direct jobs - 60% indirect jobs 20% qualified workforce - 80% non-qualified workforce
Source: National Mining Agency
Colombia has the potential to significantly expand its mining industry
Privileged position in geotectonic and metallogenic circumstances
The Andean System: • •
Shaped by 3 mountains ranges Similar situation to the Chilean, Peruvian and Mexican Andes (Sistema de la Sierra Madre)
The Guiana System: • Eastwards of the Guiana Shield (Escudo Guyanés) located in the Colombian border with Venezuela and Brazil
Significant mineral resources found in Colombia Mineral Emeralds Platinum Thermal Coal Nickel Gold Copper
World ranking 1 5 9 9 19 48
Latin America 1 1 1 2 6 6
Source: Nickel (2012): US Geological (Survey 2013), Coal (2012): World Coal Association, Gold (2011): Reuters.
World No. 1 producer of emeralds. In Latin America:
• No. 1 producer of coal and platinum • No. 2 producer of Nickel • No. 6 producer of gold and copper
窶ｦConsider the potential of the unexplored territory
51% Geological knowledge
Gold - 19.9 Mll Ha. Copper - 12 Mll Ha.
NORTE DE SANTANDER
Iron - 1.8 Mll Ha. Platinum - 1.9 Mll Ha.
30% Geochemical knowledge
Coal - 11.4 Mll Ha.
CASANARE CALDAS CUNDINAMARCA RISARALDA VICHADA
Coltan - 2.4 Mll Ha.
QUINDIO SANTA FE DE BOGOTA D. C. TOLIMA VALLE DEL CAUCA
Potassium - 1.1 Mll Ha.
5% Geophysical knowledge
Magnesium - 0.5 Mll Ha.
Nickel - 0.5 Mll Ha. Phosphate - 3.5 Mll Ha.
Uranium - 5.2
Source: National Mining Agency
Colombia is developing new infrastructure to enable the transportation of minerals
Road Infrastructure RIOHACHA PARAGUACHON
Cruz del Viso Toluviejo
La Yé NECOCLÍ
New PPP 4G SAN ROQUE Aguachica
PALO DE LETRAS
Santa fé de Ant.
Carreto CARMEN DE BOLIVAR SINCELEJO
Tunel de Occidente
SOGAMOSO SOGAMOSO PTO. SALGAR La Manuela ZIPAQUIRA VILLETA
EL SECRETO CARTAGO
Buenavista San Juan
CALERA Cáqueza PUERTO GAITAN VILLAVICENCIO VILLAVICENCIO Granada
CALI CALI STDER. QUILICHAO
More information: www.ani.gov.co
Railway and Ports Infrastructure PTO. BOLIVAR STA MARTA BARRANQUILLA
• • •
GOLFO DE MORROSQUILLO
Railways USD$10 Million Ports USD$1 Bn Fluvial $400 Million
VIZCAÍNA PTO BERRÍO BARBOSA LA DORADA LA TEBAIDA
BELENCIT O DUITAMA
More information: www.ani.gov.co BUENAVENTURA
Colombia is enhancing the institutional framework for the mining sector
Stronger and Clearer Governmental Entities National Agency of Mining Mining Authority
Minister of Mining and Energy
Colombian Geological Service Subsurface Knowledge
Deputy Minister of Energy
Deputy Minister of Mining
Mining and Energy Planning Unit Monitoring Markets & Sector Planning
New Mining Authority Board
Administration and Finance
Office of Technology and Information Legal Office Internal Controls Office
Registry Office Mining Titles Office
Monitoring, Control and Mine Safety Mine Security and Rescue issues Office Monitoring and Control Office Royalty Collection Office
Promotion and Development Development Office Promotion Office
Colombia is promoting Safe and Responsible Mining
Promoting responsible mining Economic Development • • • •
Environmental Balance •
R&D Mining clusters Infrastructure Accountability and Transparency
Social Prosperity • • •
Higher environmental requirements Best practices
Creation of Shared Value More and better jobs Respect and promotion of culture and communities
Guidelines for Multinational Enterprises – OECD OECD Due Diligence Guidance (Gold) EITI
New Framework for Sustainable Development 1.
Transparency and commitment with strategic planning and risk management.
Safety, health, welfare and human resources management.
Supply Chain Management. Local hiring and use of the environmental and social standards.
Social investment and community development.
Consistent with Development Plans.
Management of environmental impacts: resources, pollution and effects on neighboring communities.
Cerro Matoso: A new way to structure deals. Social variables within the contract.
• Social Investment: 1% of the EBITDA or US$2.5 M (the greater value) • Additional investment of US$10 M in a local development project during the first 3 years
• Mandatory involvement of the entire area of influence Environmental
• Mechanisms of annual accountability and community involvement
Environmental Clause â€˘ Environmental management clause related to social impact health and environment baselines. Economic
â€˘ Mine Closure clause: It is necessary to have a plan that commits resources in the financial statements, and to implement a trust fund five years before mine closure when there is no evidence of previous investment.
Colombia is open to foreign mining companies
Mineral Tenure Systems Staking (first come first served) • • • •
Any mineral Any area not claimed for mining Any individual or company General requirements
Public Bidding Process • 11 Strategic minerals • Strategic Mining Areas • Company with specific capacity and experience • Technical, economic and socialenvironment requirements
• Companies can be constituted up to 100% with foreign capital. • Foreign investors are considered equal to domestic investors. • Colombian government charges surface fees , mineral royalties and taxes.
Inscription in the N Refusal
Public Bidding Process:
Strategic Mining Areas (SMA)
• • • • • • • • • •
Gold Cooper Iron Platinum Coal (Thermal and Metallurigical) Columbite – Tantalite Potassium Magnesium Phosphate Uranium
SUCRE BOLIVAR CORDOBA NORTE DE SANTANDER
CHOCO BOYACA CASANARE
CALDAS CUNDINAMARCA RISARALDA
QUINDIO SANTA FE DE BOGOTA D. C. TOLIMA VALLE DEL CAUCA META
GUAINIA HUILA CAUCA
TOTAL SMA 20.5 M Ha. (18% of Colombia’s territory)
Public Bidding Process: Phases
Prior Consultation process
*National Mining Registry
Colombia offers opportunities for Australian mining and METS companies
Colombia-Australia Parnertship Colombia is still significantly unexplored, and this is encouraging growing number of companies to invest in Colombian mining opportunities Current Australian mining companies in Colombia
Colombia-Australia Parnertship Colombia’s mining sector needs to improve its competitiveness and to build mining supply chains, Australia has world-class technology and service providers Colombia is promoting responsible mining in accordance with the world’s best practices, Australia has developed a sustainable mining model: ● Environmental protection ● Engagement with indigenous communities ● Mining clusters
Colombia is a golden opportunity Let us assist you at the NMA Thanks