Portal Industrial Cartagena Colombia - Forum - Contacts

While Chile remains the hotspot for copper output, with state-owned Codelco as the biggest producer of the red metal in the world, the country is not without competition. Hopes are rising for Colombia’s copper potential, and mining companies both large and small have been beefing up their investments in the country. At the same time, miners in Colombia are more likely to learn from their past mistakes and be more mindful of balancing the need to meet investment returns on the one hand, while balancing environmental as well as social needs of the regions surrounding the mines on the other.

Prospects for copper mining in Colombia certainly look brighter, with Mines Minister Mauricio Cardenas telling Bloomberg at the World Economic Forum’s annual meeting in Davos last week that the country expects about $10 billion in international investments in mining as well as crude and energy projects this year. On his Twitter feed, Cardenas tweeted from the Swiss resort that he met with Codelco’s CEO Diego Hernandez who was “interested in exploring copper,” later tweeting that “Codelco is the leading producer of copper in the world. It is interested in exploring in Colombia.” The minister also tweeted that he met with executives from AngloGold Ashanti (NYSE:AU) as well as Glencore International (LSE:GLEN).

Such growing interest from major international mining groups is welcome news for junior miners too, of which there are plenty operating in the fourth-largest country in South America, given that Colombia is the world’s biggest producer of emeralds, in addition to having vast oil, gold, natural gas, and coal as well as copper reserves.

The spate of attention from major players is “fantastic news,” said Dave Doherty, Director of Corporate Development at CuOro Resources (TSXV:CUA). “CuOro recognized that Colombia was being underexplored for its potential copper reserves. As a first mover in the country to explore for copper we feel both vindicated and excited that a major, like Codelco, the leading producer of copper in the world has entered the country.”

As an exploration company with $18.5 million in cash, Vancouver-based CuOro, under the leadership of Robert Sedgemore, who was formerly the senior head of mining at the International Finance Corporation, expects copper to reach between $3.50 and $4.00 per pound in 2012. Despite the continued sluggishness in the global economy, demand for commodities and copper in particular is expected to remain steady, especially in light of strong Chinese demand.

Commitment to environmental sustainability

There is no doubt that demand for the red metal is only going to rise moving forward, especially as the United States shows signs of steady recovery from a prolonged recession. The burning question for mining companies large and small, though, is whether it can tap into Colombia’s mineral wealth and meet investors’ demands on the one hand, while ensuring sustainable business practices that minimize environmental impact and bolster local economies as well on the other. A United Nations report on global sustainability released this week stated that countries needed to cut back on using natural resources and biodiversity losses whilst increasing productivity as a means to reduce poverty, and Colombia may be better poised than other countries to meet such challenging demands.

Major oil and gas producers in Colombia are interested in bolstering output and ensuring sustainable development, and that interest is likely to be extended to copper miners, said Christian Seale, Chief Operating Officer at Equitable Origin, a group which offers a stakeholder-based certification system for the energy sector that promotes sustainable environmental standards as well as accountability. The group gives the seal of approval on a project basis, rather than to a company as a whole.

Miners in Colombia are already being proactive in meeting the environmental and community needs of where their projects are. CuOro, for instance, has established a Corporate Responsibility Committee within the board of directors to oversee environmental as well as safety issues, in addition to using the Equator Principles to assess and manage environmental as well as social risks.

“Our current mining activities are subject to extensive federal, provincial and municipal laws governing environmental protection, employee health and safety, mine tailing management. As well, we have an opportunity through our mining operations to have a beneficial economic and social impact on local communities,” CuOro’s Doherty said.

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