Mining News

Colombia’s security situation still a concern to mining companies

Posted by Cheryl Rutledge on 3/5/2014 2:35:57 PM

By Alana Wilson

Peter Koven’s reporting from PDAC 2014 in the Financial Post included an interview with the Colombian mining and energy minister, Amylkar Acosta.

Acosta said the recent peace talks with FARC rebels in Havana have cooled tensions with all rebels significantly. He said kidnappings have been reduced, and there have been promises from rebels to stop the acts as a result of the Havana talks.

“We have never been so close to achieving peace,” he said through an interpreter.

While the government’s commitment towards peace is commendable, the security situation in Colombia is still of concern to mining companies operating in the region. Koven notes:

Last year, an executive from Canadian junior miner Braeval Mining Corp. was kidnapped, and more than 20 employees of Talisman Energy Inc. were kidnapped in 2011. All were freed, but the incidents renewed safety and security concerns within the country.

The results of the 2013 Survey of Mining Companies reflect this concern in Colombia, and there was a notable increase in the percentage of respondents rating that they were strongly deterred or would not pursue investment in Colombia as a result, increasing from 30% in 2012/2013 to 55% in 2013. The trend over the last five surveys is also somewhat mixed. After decreasing the percentage of such negative responses from 2009/2010-2011/2012, the past two years have seen this trend reversed.

Colombia graph

Nonetheless, the security situation in Colombia is much less of a barrier to miners than in 2006/2007 when Colombia was first added to the survey. In that year, 43% of respondents rated security as a strong deterrent to investment and an additional 40% would not pursue investment as a result.

Colombia’s score and ranking in this year’s survey decreased, indicating that it was less attractive to mining investment. This is the fourth year in a row where Colombia’s score has declined. Between the 2012/2013 and 2013 surveys, Colombia’s rating dropped most in uncertainty concerning the administration, interpretation and enforcement of existing regulations; trade barriers, and for regulatory duplication and overlap.

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