- Posted by Colombia
- On Thursday June 13th, 2019
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Colombia’s economy benefits heavily from its exports of raw materials particularly the from its mining-energy sector. Colombia’s top exports include coal, nickel and gold. These exports are produced in various areas of the country including northern areas such as La Guajira, Cesar and Córdoba.
Throughout recent years, the role of mining in Colombia has been increasing rapidly. Between 2010 and 2015, the mining sector contributed 19.6% of exports and 16% of direct foreign investment. 2017 was also fruitful, with high production in areas such as coal, which reached 90 million tons. Exports grew 35% in 2017 and exceeded 1.2 billion dollars. The first quarter of 2018 experienced a 135% growth in foreign direct investment compared to the same period in 2017, reaching the level of 1.039 billion dollars according to statistics of the National Agency of Mining.
The current year looks equally promising for the mining industry. According to Santiago Ángel Urdinola, the president of the Colombian Mining Association, he expects foreign direct investment in to soon exceed 1.5 billion dollars.
Mining has experienced a few recent positive legal developments. At the end of 2018, the Constitutional Court, issued a ruling that determines that the legal mechanism of the Popular Consultation cannot stop mining activities such as extraction. This ruling gives companies and their investors greater legal security when it comes to advancing mining projects in the country. Additionally, the National Development Plan, the basis for the generation of public policies in Colombia, has sought to boost the sector and facilitate the implementation of mining in Colombia.
To maintain the growth and continue to promote the sector, the Colombian government has advanced diplomatic efforts aimed at this end. One of the most significant is the signing of an energy understanding agreement with the United States at the Concord Summit for the Americas in 2019. In this document, cooperation guidelines were established between the two nations for technological exchange, the training of personnel, assistance in the exploration for the search of new unconventional deposits and other projects.
Mining also generates significant employment. The mining and energy sector generate close to 350,000 direct jobs in the country and represent 2% of the gross domestic product (GDP). Likewise, mining activity generates important royalties for the regions where it is carried out, which greatly benefits the local economy and a greater investment in infrastructure. Since 2010, 5.5 billion dollars in royalties have been generated.
In the long term, predictions for the sector also present important figures for domestic and foreign investors. The Colombian Ministry of Mines and Energy has provided optimistic future scenarios. One such scenario is the possibility Colombia to generating 8% of the world’s copper production by 2030 due the more than 600 mining titles for the exploitation of copper. Copper is estimated to reach double the current demand 2050.
Colombia’s promising mining and energy sector is providing opportunities now and in the future. A positive outlook, increased legal protection and a supportive government make the mining and energy sector ripe for exponential growth and increased foreign direct investment.
SRS Colombia has expert destination consultants in the main cities of the country, including the cities of Riohacha, Valledupar and Montería.
Agencia Nacional de Minería. (2018). IED Minas y Canteras crece en 2018. Retrieved May 28, 2019, from http://mineriaencolombia.anm.gov.co/index.php/es/ied-minas-y-canteras-crece-en-2018
Caracol Cartagena. (2019, May 11). El sector minero genera 350 mil empleos directos en Colombia. Retrieved May 28, 2019, from https://caracol.com.co/emisora/2019/05/11/cartagena/1557569427_072993.html
Dinero. (2018, December 4). La paradoja que vive el sector minero en Colombia. Retrieved from https://www.dinero.com/edicion-impresa/negocios/articulo/situacion-del-sector-minero-en-colombia/257223
El Tiempo. (2018, October 12). Claves del fallo sobre consultas para frenar actividades extractivas. Retrieved May 28, 2019, from https://www.eltiempo.com/justicia/cortes/corte-constitucional-dice-que-consultas-minares-no-pueden-frenar-la-mineria-280304
La República. (2019, May 13). Ministerio de Minas y Energía firmó memorando de entendimiento energético con EE.UU. Retrieved May 28, 2019, from https://www.larepublica.co/economia/ministerio-de-minas-y-energia-firmo-memorando-de-entendimiento-energetico-con-eeuu-2861383
Ministerio de Minas y Energía. (2016, April). POLÍTICA MINERA DE COLOMBIA. Retrieved May 28, 2019, from https://www.minenergia.gov.co/documents/10180/698204/Política Minera de Colombia final.pdf/c7b3fcad-76da-41ca-8b11-2b82c0671320
Portafolio. (2018, November 19). ‘En 2019, inversión minera estaría por encima de US$1.500 millones’. Retrieved May 28, 2019, from https://www.portafolio.co/economia/en-2019-inversion-minera-estaria-por-encima-d-los-us-1-500-millones-523548m