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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 investors‌


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

Perú

24

Panamá

7

Chile

-5

Ecuador

8.3

Perú

20

Brasil

Colombia

6.3

México

-7

6

México

-10

Brasil

Chile

-11

Panamá

4.7

Argentina

4.7

Argentina -12 Venezuela -13

Venezuela

Costa Rica-16 -20

5.3

-10

0

10

20

30

40

2.3 0

Source: World Bank, Doing Bussines Report 2007 - 2012. *Positive values show improvement in business environment

1

2

3

4

5

6

7

8

9

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

Mineral

• 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

Company

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

Metallic minerals

Non-metallic minerals

7,000.0 6,000.0

636.0

5,000.0 4,000.0

421.0

3,000.0 2,000.0 1,000.0 0.0

174.0

2000

2006

2011

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

Source: http://www.simco.gov.co/simco/portals/0/Guia_Inv_2008/3_mining_4.swf


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

ツュ

LA GUAJIRA

ATLANTICO

MAGDALENA

51% Geological knowledge

CESAR

Gold - 19.9 Mll Ha. Copper - 12 Mll Ha.

SUCRE

BOLIVAR

CORDOBA

NORTE DE SANTANDER

Iron - 1.8 Mll Ha. Platinum - 1.9 Mll Ha.

SANTANDER

ANTIOQUIA

ARAUCA

30% Geochemical knowledge

CHOCO

Coal - 11.4 Mll Ha.

BOYACA

CASANARE CALDAS CUNDINAMARCA RISARALDA VICHADA

Coltan - 2.4 Mll Ha.

QUINDIO SANTA FE DE BOGOTA D. C. TOLIMA VALLE DEL CAUCA

META

GUAINIA

Potassium - 1.1 Mll Ha.

HUILA CAUCA

5% Geophysical knowledge

Magnesium - 0.5 Mll Ha.

GUAVIARE

NARIテ前

VAUPES

CAQUETA PUTUMAYO

Nickel - 0.5 Mll Ha. Phosphate - 3.5 Mll Ha.

AMAZONAS

Uranium - 5.2

Mll Ha.

Source: National Mining Agency


Colombia is developing new infrastructure to enable the transportation of minerals


Road Infrastructure RIOHACHA PARAGUACHON

SANTA MARTA

Cuestecitas

BARRANQUILLA

Cruz del Viso Toluviejo

Approximate Investments:

La Yé NECOCLÍ

MONTERIA

New PPP 4G SAN ROQUE Aguachica

Achí

San Marcos

Planeta Rica

PALO DE LETRAS

Aguaclara

CAUCASIA Simití

El Tigre

USD$26 Bn

CUCUTA

BARRANCAB. REMEDIOS

Santa fé de Ant.

La Paz

Carreto CARMEN DE BOLIVAR SINCELEJO

SAN PELAYO

Tunel de Occidente

Camilo C

B/MANGA

Barbosa

PTO CARRENO

SOGAMOSO SOGAMOSO PTO. SALGAR La Manuela ZIPAQUIRA VILLETA

Sopó

TUNJA Sisga

YOPAL

EL SECRETO CARTAGO

BOGOTA

ARMENIA IBAGUE

GIRARDOT

ESPINAL BUGA

BUENAVENTURA

ARAUCA

TAME

MEDELLIN

MANIZALES

LA PAILA

Pamplona

Pto. Berrío

Bolombolo

PEREIRA

Current PPP

Buenavista San Juan

Ponedera VALLEDUPAR

CARTAGENA

Pto. Arimena

CALERA Cáqueza PUERTO GAITAN VILLAVICENCIO VILLAVICENCIO Granada

CALI CALI STDER. QUILICHAO

NEIVA

POPAYAN

CHACHAGÛÍ PASTO

MOCOA

More information: www.ani.gov.co


Railway and Ports Infrastructure PTO. BOLIVAR STA MARTA BARRANQUILLA

DIBULLÁ

CIÉNAGA

CARTAGENA

• • •

Approximate Investments:

GOLFO DE MORROSQUILLO

CHIRIGUANÁ

TURBO

Railways USD$10 Million Ports USD$1 Bn Fluvial $400 Million

LA GLORIA

VIZCAÍNA PTO BERRÍO BARBOSA LA DORADA LA TEBAIDA

STA SOFIA

BELENCIT O DUITAMA

ZIPAQUIRA

BOGOTA D.C.

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

President’s Office

Office of Technology and Information Legal Office Internal Controls Office

Entitlement

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.

2.

Safety, health, welfare and human resources management.

3.

Supply Chain Management. Local hiring and use of the environmental and social standards.

4.

Social investment and community development.

5.

Consistent with Development Plans.

6.

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

Economic

Responsible Mining

Social

• Mandatory involvement of the entire area of influence Environmental

• Mechanisms of annual accountability and community involvement


Cerro Matoso:

Environmental Clause • Environmental management clause related to social impact health and environment baselines. Economic

Responsible Mining

Social

Environmental

• 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.


Staking: Procedure

Inscription in the N Refusal


Public Bidding Process:

Strategic Mining Areas (SMA)

­

LA GUAJIRA

• • • • • • • • • •

Gold Cooper Iron Platinum Coal (Thermal and Metallurigical) Columbite – Tantalite Potassium Magnesium Phosphate Uranium

ATLANTICO MAGDALENA

CESAR

SUCRE BOLIVAR CORDOBA NORTE DE SANTANDER

SANTANDER

ANTIOQUIA

ARAUCA

CHOCO BOYACA CASANARE

CALDAS CUNDINAMARCA RISARALDA

VICHADA

QUINDIO SANTA FE DE BOGOTA D. C. TOLIMA VALLE DEL CAUCA META

GUAINIA HUILA CAUCA

GUAVIARE

TOTAL SMA 20.5 M Ha. (18% of Colombia’s territory)

NARIÑO

PUTUMAYO

CAQUETA

VAUPES

AMAZONAS


Public Bidding Process: Phases

2013

2014


Concession Contract

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

Latin American Down Under - Sydney may292013  

National Agency of Mining - Latin American Down Under

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