Friday, April 16, 2021

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Roberto Peckham

Medellin-based textile giant Coltejer revealed in a December 17 filing with Colombia’s Superfinanciera oversight agency that it now plans to abandon its foundational factory in the southern Medellin suburb of Itagüí.

When this abandonment is complete, all remaining textile operations will shift to Rionegro, Antioquia, according to the company, founded in 1907 by pioneering industrialist Alejandro Echavarría Isaza, his son Gabriel and five nephews.

Echavarría not only became Medellin’s most famous industrialist of the era, but also a crucial social benefactor with the founding of the Hospital San Vicente de Paúl complexes.

Echavarría later bought Medellin’s most famous castle-style residence, “El Castillo,” today a museum and event center owned by the city of Medellin.

Coltejer faced the first of many future financial crises in 1974 when world-wide textile manufacturers went overboard on production, resulting in below-cost contraband trade to Colombia. Such contraband has continued ever since, causing huge financial losses to Colombia’s textile producers generally and Coltejer specifically.

In 1978, Medellin-based industrial giant Carlos Ardila Lulle bought the majority of shares in the company, but he couldn’t reverse its fortunes. Then, in 2008, Mexican textile giant Grupo Kaltex became the majority shareholder, trying to find financial synergies.

According to yesterday’s filing with Superfinanciera, Coltejer’s board of directors have finally given-up on the historic Itagüí plant, selling it to real-estate developer Acierto Inmobiliario SA. As a result, Coltejer now plans to move its remaining operations to the Rionegro plant -- tied to modifying certain outstanding credit arrangements with Grupo MCM Colombia S.A.S.

The credit rearrangement deal is tied to “canceling some guarantees that were in favor of [MCM] in order to replace them with properties located in the municipality of Rionegro. Mr. Rafael Kalach [president of Kaltex] abstained from voting on this proposition,” according to Coltejer’s filing.

“In accordance with the negotiation of a part of Coltejer’s land in Itagüí, the industrial operations of the plant [in Itagüí] will be discontinued, leaving the Rionegro plant in operation,” according to Coltejer.

Lands occupied by Coltejer’s factory complexes in Itagüí – now scheduled for non-industrial redevelopment -- are valued at COP$178 billion (US$52 million), according to the filing.


Global mining giant AngloGold Ashanti Colombia announced December 16 that it has launched initial recycling of mine tailings near Jericó, southwest Antioquia, into a cement-like product suitable for buildings, prefab homes, roads, ceramics, paints, outdoor furniture and soil amendments.

The announcement comes on the heels of new demands from Colombia’s environmental licensing agency (ANLA) and Antioquia’s Mining Secretariat for more information on how AngloGold Ashanti aims to avoid environmental impacts from its proposed “Quebradona” copper-gold mine near Jericó.

To date, AngloGold has already fabricated outdoor furniture, chairs, drinking fountains and flower pots – all made from tailings -- for three schools in Jericó.

“In order to help close the cycle of waste produced by mining activity and thus advance in the generation of a true circular economy, ‘Minera de Cobre Quebradona’ will implement different alternatives to give a new use to dry tailings,” according to AngloGold.

“We are testing the dry tailings in different applications,” explained Andrés Felipe López Bermúdez, Manager of Innovation at the Quebradona project. “The inert tailings -- which are almost dry -- are very fine sands, which have a thousand possibilities in terms of construction. Soon we will do the first test of tailings for paving tertiary roads. We have a possibility of paving 1,800 kilometers of tertiary roads in the southwest [Antioquia], where the tailings of Quebradona can serve this purpose and enhance the competitiveness of farmers so that they can move their products with less travel times,” López added.

On a related front, AngloGold announced December 15 that it is generating additional data for ANLA regarding “monitoring of surface water quality, hydrobiological and isotopic parameters in the tributaries of the upper, middle and lower parts of the La Palma and La Guamo streams that are in the [rural districts of] La Hermosa, Palocabildo, Vallecitos and La Soledad,” near the Quebradona mining site.

As for the Secretariat of Mines of Antioquia, “as part of the mining licensing process, an alignment and understanding meeting was held between the technicians of the Secretariat and Minera de Cobre Quebradona staff to clarify and respond to a large part of the [additional environmental data] requirements,” according to the Secretariat.

The additional data will include updates and revisions to maps and geological studies in specific mining areas, according to the Secretariat.

Mayor of Jericó Supports Project

While various environmental advocacy groups and some nearby residents have raised fears and objections to the proposed underground mine, Carlos Augusto Giraldo, former two-time Mayor of Jericó, argued in a December 7 column in Jericho newspaper Al Poniente that AngloGold has proven to be an environmentally and socially responsible miner.

“In the framework of the ANLA’s recent visit to Jericó, some opponents of the Quebradona project affirmed on social networks and in the media that the vast majority of Jericoanos had come out to protest against it,” Giraldo stated.

“The reality is that of the almost 100 people who took to the streets, only a few, less than 10, were from the municipality. The rest came from other places in buses and collective taxis.

“This is a clear example that what happens in Jericó is different from what some people think and declare from Medellín, from Bogotá, from far away Miami or from those who sign applications on the internet from other municipalities, or even from outside the country.

“The mining company’s workers are not at some desk processing a license. They are usually here in Jericó, they get involved with the people, they listen to the questions and they respond with transparency.

“It is true that, in recent years, thanks to the work carried out to promote tourism and other agricultural activities, the municipality has developed new sources of resources and employment.

“But if we Jericoanos have something clear, it is that there is still a long way to go in terms of education, health and well-being. For this reason, a large part understands that all [mining] activities can be carried out with responsibility and oversight by the state and citizens.

“Some data about what Jericó is experiencing: according to the DNP [Colombia’s national development planning department], the net coverage of education here is 77.7%, compared to 84.5% in Antioquia. In secondary education, aimed at 10th and 11th grade youth, the net coverage is 52.2%.

“Likewise, a study carried out by the ECSIM Foundation indicated that one out of every five inter-municipal trips made from the [southwestern Antioquia] province of Cartama to Medellín is for health reasons due to the lack of the required health-care services here.

“Although Jericó does better than some of its neighbors in DANE’s [Colombia’s economic statistics agency] multidimensional poverty indicators, there are areas of the municipality that register percentages of up to 100%.

“In this context, Minera de Cobre Quebradona has understood that its role as a catalyst for the economy must positively impact other social aspects, for which it has worked using institutional channels to support local entities.

“What happens in Jericó, as referenced by the National Consulting Center in a study published in May, is that the majority of people here support the project, not for one reason, but for the multiple reasons mentioned above.

“My invitation to the opponents is to listen to the people, understand their fears and provide solutions, as the mining company has done in recent years. It is also important that opponents resolve their technical or social doubts about the project by asking questions, but not by accusing and even less, by assuming [negative outcomes].

“As Colombian author Héctor Abad Gómez has said, ‘the courage to admit that one does not know, that one doubts, that one is not sure, although difficult to practice, is an indispensable value in today’s world,’” Giraldo added.


Medellin’s Environment Secretary Diana María Montoya Velilla announced December 12 the first-ever confirmed sighting of a Southern Beardless Tyrannulet (Camptostoma obsoletum, see photo, above), making it the ninth recording of previously unrecorded bird species here this year.

The bird, locally known as “mosquerito silbón,” was sighted in the Cerro Nutibara park, not far from the city center.

The Southern Beardless Tyrannulet, “a species never before registered in our city,” is native to Central and South America, usually found in semi-open areas and forest edges, according to the Environment Secretary.

“These findings are the result of protection and conservation efforts in this area, with which we guarantee ideal conditions for the fauna and flora that live here,” Montoya said.

“Among the ecosystem benefits offered by Cerro Nutibara is a barrier to urban expansion, support for ecological connectivity, climate regulation and soil protection,” she added.

The “mosquerito silbón" measures 10 centimeters in height, has grayish and opaque-yellow feathers and a disheveled forelock. It feeds mainly on flying insects and some fruits, “contributing to the biological control of insect populations and the dispersal of seeds for botanical renewal,” according to the Environment Secretary.

During 2020, 22 new species of wildlife have been reported in Medellín, of which nine are birds, “this being the year in which more wildlife has been recorded in the strategic ecosystems of the city,” the Secretary added.


“Colombia El Pais de los Extremos” (Colombia the Nation of Extremes) is Ecuadorian diplomat-scholar Eduardo Durán-Cousín’s new, 783-pages-long history and analysis of more than 500 years of Colombia’s cultural, social, economic and political triumphs and tragedies.

For any foreigner sufficiently fluent in Spanish and trying to understand why Colombia in several key ways is more like -- but simultaneously also more un-like -- the United States than any other Latin American country, “Colombia El Pais de los Extremos” (La Carreta Editores, published in Medellin, September 2020) can be useful, as it’s the most recent scholarly work here -- widely reviewed in the Colombia mainstream media (and now, here, in Medellin Herald).

The book’s early chapters recount the European-biased observations of Spanish explorers, priests and conquerors about the existing and highly diverse aboriginal peoples here -- some of them relatively peaceful, pastoral, even submissive tribes, others (especially in Antioquia) more interested in trade and commerce, while still other tribes – and later-on, through their inter-mingled Spanish/native descendants -- practicing unimaginable savagery, conquests and even cannibalism.

The book’s most controversial (and racist) speculations about Colombia’s pre-and-post-Spanish-conquest-peoples include sections positing the notion that DNA and customs of the most savage tribes here later infected and subconsciously provoked incredibly bloody savagery by many current and past guerrillas, political armies and gangster groups here. One can only wonder what was in the pipe, smoking, when these paragraphs were written, given the horrific history of the entire human race (Nazis and Auschwitz, for example?)

But leaving aside dubious speculations about the origins of Colombian savagery, more important and more revealing is Durán-Cousín’s recounting of the central importance of the people of Medellin and Antioquia for dominating national (and even international) industry and commerce, even with the physical shifting or duplication of some local, foundational factories and some national administrative offices from Medellin to demographically bigger Bogota in recent decades.

As Durán-Cousín writes in the book’s first words about Antioquia, “the proverbial entrepreneurial spirt of Colombians, facilitated by the chronic absence of a strong central government, began in Antioquia and from there, by example and by migration of Antioquian people, irradiated throughout the country” -- a phenomenon especially apparent in the second half of the 20th Century.

Even more remarkably, in the latter part of the 19th Century, Medellin not only became the most important industrial city in Colombia, but also the most important manufacturing center in all of northern South America, Durán-Cousín points out, citing numerous sources.

Citing (for example) noted Colombian economic historian Salomon Kalmanovitz, Durán-Cousín recounts several crucial factors explaining why the “paisas” (the people of Antioquia) have dominated Colombian commerce and industry.

First came profitable gold mining here, then banking, then coffee exporting, then the rise of supporting industries (textiles, foundries, manufactures) --all crucially undergirded by the entrepreneurial, industrious customs of a particular sub-group of mainly Spanish descendants, many of them with Jewish cultural roots (although most forcibly converted to Catholicism during and after the mass expulsions and persecutions by the Spanish Inquisition starting 500 years ago and continuing for centuries afterward).

Notable also is that such historic discrimination and persecution continued in Colombia even right up until the early 19th Century in the Caribbean coastal city of Cartagena -- distant from the relatively safe, remote mountains of Antioquia, where if one so desired, one’s past could be more easily hidden, ignored, downplayed, low-keyed or forgotten, which helped to open doors to new freedom and opportunity (as some of Colombia’s greatest novelists likewise have illustrated).

What’s more, a peculiar flavor of Catholicism --mainly practiced here in Antioquia-- is much more inclined to accept financial success as not inconsistent with spiritual salvation, Durán-Cousín notes.

As such, one can see parallels to the North American historical experience -- where countless industrious people escaping European persecutions and prejudices likewise found freedom, opportunity and prosperity in the New World.

However, Antioquia -- with few exceptions -- mostly avoided the poisonous, debilitating, dehumanizing and lethargy-inspiring crime of African slavery that has scarred, wrecked and ruined so much of an otherwise “freedom-loving” USA – even right up to today. A shameful history linked to a hypocritical kind of “Christian” prosperity where even slavery got trumped-up Biblical excuses and exemptions.

In contrast, the growth of a huge middle class of Antioquian entrepreneurs here – NOT employing slavery – came via the coffee boom of the 19th and 20th centuries, starting in Antioquia and expanding to neighboring departments.

This self-sufficient, entrepreneurial idiosyncrasy is at the core of what makes a “paisa,” Durán-Cousín notes – and this resonates among vast portions of the North American population as well.

But while one can find correlations between many paisas and many North Americans, contradictions also exist, although some of these have been overcome through time, the book shows.

For example: U.S.-Colombian relations were strained with the secession more than 100 years ago of the former Panama province from the nation of Colombia. But the book notes that Panamanians overwhelmingly favored that separation, for both economic and political reasons, starting with the historical negligence of Colombia’s central government toward outlying provinces.

But ever since the Colombia Congress in 1923 ratified the Urrutia-Thompson Treaty that required the U.S. government to compensate Colombia for the Panamanian secession, Colombia has maintained particularly strong political, economic and military-aid ties with the U.S., much to the consternation of pro-Soviet, pro-communist and other left-wing politicians.

However, despite these cold-war and post-cold-war era political conflicts, as well as the “La Violencia” civil war of 1948 to 1958 and the subsequent FARC, ELN and M-19 guerrilla terrorism, Colombia’s other, prior, centuries-long political struggles – triggering frequent, bloody civil wars --weren’t fought along class lines (peasant versus landlord, worker versus capitalist), Durán-Cousín notes.

Rather, these wars were mainly between the “elites-dominated” Conservative and Liberal Parties -- conflicts that came to an end following the brief military government of General Rojas Pinilla at the end of the “La Violencia” conflict of the 1950s, the book notes.

Then, in 1991, Colombia enacted a new, modernized, liberal Constitution, which triggered the decline of the old Liberal and Conservative Parties and gave rise to a multiplicity of new parties of various ideological stripes and of “charismatic” leaders.

In some respects, today’s non-violent political battles in Colombia are similar to the non-violent political battles between Democrat and Republican Parties in the U.S., at least following the end of the U.S. Civil War of 1860-1865.

Unfortunately, like so many other Latin American historic and sociological treatises, Durán-Cousín’s “Colombia El Pais de los Extremos” book falls into a familiar trap of lamenting the absence here of a strong, unified, class-based social-democratic “left” party that would compete for votes with a more traditional, capitalist-oriented conservative party.

Supposedly, a strong social-democrat party here arguably would have provided an alternative to the violent communist guerrilla movements, which (falsely) were claimed to have arisen because of “oppression” and “lack of democracy” in Colombia. In fact, Colombia’s democracy is more than 200 years old, and left-wing currents (and several coalition governments) have long been a part of the Liberal Party, although centrist and rightist factions frequently dominated among the Liberals. Social-democrat factions also have existed in the Conservative Party and in its various coalition governments, the book shows.

On the other hand, Durán-Cousín correctly observes that Colombia’s relatively violent political history has mainly been a competition between some well-off elites, supported by the majority of poorer populations, with the poor used as cannon-fodder in the many civil wars.

Yet history shows that the same cynicism is just as true of the FARC and other communist, extreme leftist, narco-communist and paramilitary gangsters here, all of whom have sought to overthrow or manipulate the existing capitalist elites and replace them or sabotage them with crypto-capitalists -- communist and narco-gangster dictatorial power -- rather than bring about any real “social justice.”

In his proposed recipes for reform, Durán-Cousín also unfortunately repeats the old canard that what Colombia really needs is “land reform” that supposedly would end the injustice of relatively few big landholders “misusing” their landholdings and preventing poor peasants from getting a bigger piece of the land pie.

First problem with this argument: agricultural producers need profitable products from land, not just bigger areas of land.

Second problem: Splitting up big haciendas into smaller parcels -- supposedly to benefit hundreds of thousands or millions of mainly rural residents – wouldn’t automatically yield profits from that land -- and may do the opposite, by imposing smallholder inefficiencies.

Which is why coca and cocaine have conquered vast acreages among Colombia’s small farmers (not the big haciendas), as “white powder” is far more profitable than “land reform.” And which explains why thousands of FARC militants since have abandoned the 2015 “peace treaty” and gone back to cocaine trafficking, murder and extorsion -- as these are more profitable than conventional subsistence farming or the fantastical idea of “land reform.”

Correctly, Durán-Cousín laments the historic fragmentation of Colombia -- caused by weak central government, a mountainous, isolated terrain and very poor roads compared to its neighbors -- which helps explain the historic rise of warlord guerrilla armies and violent political competitions.

But he gets the solution wrong, by proposing the elevation of a stronger, unified left-wing party to counter the power of the existing conservative “elites” and thus supposedly expanding social justice, peacefully.

Ironically, the one Colombian President who did more than all others in the entire history of the country to boost social progress, economic progress, reduce isolation and diminish narco-terrorist violence wasn’t a “left” or “right” President.

Just the opposite.

Instead, this uniting President was Alvaro Uribe Velez, a thoroughly centrist politician -- a rather steelier version of incoming centrist U.S. President Joe Biden -- who won the hearts and minds of a huge majority of all Colombian social classes and regions, twice.

The only Colombian President in history who spent his weekends during his two terms traveling to every small town and village in every corner of the country, listening to ordinary people (not elites), promoting and elevating Colombia as one nation, one people, one democracy, seeking greater economic, political and social progress. And suffering numerous assassination attempts in the process.

The only President who virtually destroyed the FARC militarily and potentially paved the way for a future “peace” agreement that some day might actually achieve real, laudable goals, rather than the current “peace” mess that hasn’t stopped guerrilla violence, corruption or massive narco-trafficking.

Likewise, the only President who without fear welcomes face-to-face debate with Colombia’s leftist extremists -- including angry students and demagogic politicians.

The one politician who put country above class or ideology, at the risk of his own life. But also the one that Durán-Cousín terms in the book as a “clientelist” politician, like something in the mode of a “caudillo.”

Erroneous again.

Uribe -- unlike typical banana-republic strongmen, or hate-spewing, demagogic, reactionary hucksters like outgoing U.S. President Donald Trump – is a through-and-through democrat, unafraid of losing any election and unflinching in the face of continuing persecutions by corrupt judges, ideological extremists and jealous political rivals of various stripes.

Which is exactly what Colombia has always needed -- not “land reform,” or demagogues, or a “stronger left-wing party” as Durán-Cousín suggests. Instead, what Colombia needs is more centrists, more moderates, more unifiers, more reformers, more investors, more middle-class people, more kind, decent and ethical people, more educated people, more entrepreneurial people and more democrats (with a small “d”).


Colombia’s Comptroller-General (Contraloria General de la Republica, CGR) Carlos Felipe Córdoba on December 3 announced long-expected mismanagement charges against 28 individuals and companies including contractors, former EPM board members, former Medellin Mayors and former Antioquia Governors for actions and omissions that contributed US$1.18 billion in losses at the estimated US$5 billion Hidroituango hydroelectric project.

“The CGR technically calculates a loss of profits of COP$1.1 trillion (US$317 million) and a detriment to public assets of COP$2.9 trillion (US$836 million),” according to the watchdog agency.

“Among the 28 defendants are 10 members of the board of directors of Hidroituango, two former managers of EPM, two managers of Hidroituango, one manager of the EPM-Ituango subsidiary, two former mayors of Medellín and two former governors of Antioquia. The rest [of those charged] are contractors,” according to CGR.

Those charged include former Antioquia Governors Sergio Fajardo and Luis Alfredo Ramos; former Medellín Mayors Aníbal Gaviria and Alonso Fabio Salazar; and former EPM general managers Juan Esteban Calle and Federico Restrepo.

Also charged are former EPM board members and Hidroituango officials including Alejandro Antonio Granda, Álvaro Julián Villegas, Sergio Betancur, Álvaro de Jesús Vásquez, Ana Cristina Moreno, Iván Mauricio Pérez, Jesús Arturo Aristizábal, Luis Guillermo Atehortúa, John Alberto Maya, Jorge Mario Gallón, Luis Javier Duque, María Eugenia Ramos and Rafael Andrés Nanclares, according to CGR.

The companies facing charges include Consorcio CCC Ituango (Construccoes e Comercio Camargo Correa, Constructora Conconcreto y Coninsa Ramón H.S.A), plus the Consorcio Túneles Ituango (Ferrovial Agroman Chile y Sainc Ingenieros Constructores), the Consorcio Ingetec-Sedic (Ingetec y Sedic) and the Consorcio Generación Hidroituango (Integral e Integral Ingeniería de Supervisión).

“When issuing this important decision, the Comptroller’s Office considered that the mistakes made in the Hidroituango project had three serious consequences:

“1. The first consequence is that the main objective of the project was not met, which was to generate energy already contracted and agreed for the year 2018, which produced the aforementioned loss of profits totaling COP$1.1 trillion (US$317 million).

“2. The second is that there was a disproportionate increase in Hidroituango’s costs. Initially it was agreed at COP$6 trillion (US$1.7 billion) and, due to failures and improvisations, it ended up costing about COP$13 trillion (US$3.74 billion), due to the destruction of the value of the project as of June 2019.

“3. And the third consequence is the serious [tunnel-collapse] contingency that in April 2018 threatened to cause a public calamity in the project's area of influence and for which resources had to be invested in more works."

In the run-up to the formal charges, CGR assembled a technical team including researchers at Universidad Nacional, finance experts and legal experts, according to the agency.

Since Hidroituango now isn’t expected to start generating electric power until 2022 – instead of the planned December 1, 2018 start-up – the project will have failed to generate 2.87 trillion megawatt-days of power from 2018 to 2038, at a loss of US$13.99 per megawatt-hour.

“The CGR's technical team carefully evaluated -- with all the technological supports -- if there were unjustified increases in investments that affected the net value of the project or if the delay in starting operations generated a loss of profit that was would translate into damage of a fiscal nature,” the agency added.


Colombia’s Health Minister Fernando Ruiz announced December 1 that international air travelers to Colombia won’t have to pass a pre-flight PCR test for Covid-19 -- nor spend 14 days in automatic quarantine here -- despite a recent Bogota District Court order.

“Travelers entering the country will not have to undergo the PCR test for Covid-19 until the concerns raised by the judge who made the decision to demand [PCR testing proof] again in the national territory are resolved,” Minister Ruiz announced.

“It is practically impossible to make an immediate application of the ruling that orders the application of PCR tests to travelers entering the country. I want to give some peace of mind to travelers and let them know that from the Health Ministry, we will make the best decision” on whether to appeal the decision, he added.

The announcement from Minister Ruiz follows a sentence handed down last week by an 11th District Court in Bogota, in response to a petition brought by lawyer claiming that Colombia’s recent abolition of PCR tests for international travelers threatens further spread of Covid-19.

The Health Ministry on November 4 had abolished a prior regulation that required all international passengers flying to Colombia to pass a PCR test within 96 hours of boarding the flight.

Instead, passengers now must go through a body-temperature checkpoint at departure and arrival, wear face masks, report any possible symptoms, and fill-out the “Check-Mig” cell-phone application that's linked to Colombia’s “Sustainable Selective Testing, Tracking and Isolation” (PRASS) system for Coronavirus contact tracing.

Any passengers subsequently showing Coronavirus symptoms are required to enter quarantine here.

In addition, “airlines must inform their passengers that when they arrive in Colombia they will be monitored by their [health] insurer, the Ministry of Health or through the CCNR National Tracking Contact Center,” according to the Ministry.

While the PCR test is highly accurate, the problem with any one-time test up-to-96-hours before a flight is that a person in early stage of Coronavirus infection – including those asymptomatic -- typically won’t have generated enough antibodies to generate a definitive result even with PCR, the Health Ministry noted.


Editor's Note: The annual Colombia Gold Symposium (CGS) conference here in Medellin -- organized by CGS director, veteran mining journalist and British expat Paul Harris -- brings together leading international and domestic mining companies, consultants and government regulators, to explore the challenges and opportunities of gold mining here in Antioquia as well as elsewhere in Colombia and in neighboring countries.

Below we reprint Paul Harris' outstanding recap of the history of the giant Buritica, Antioquia gold-mining project, recently sold by Canadian mining developer Continental Resources to Chinese mining giant Zijin Resources.  This article is not only factual but also keenly observational about the profound risks and rewards of undertaking large-scale gold and copper mining in Antioquia and Colombia.  Harris's opinions are of course his own and not necessarily those of Medellin Herald. Enjoy!


Buritica: A Triumph Against the Odds
from: Colombia Gold Symposium (CGS) December2020 newsletter
by Paul Harris
(for subscription information, see: https://colombiagold.co/ )

On Friday 23 October 2020, Colombian President Ivan Duque helped inaugurate Zijin Continental Gold’s 282,000 ounces/year Buritica gold mine in Antioquia, Colombia.

A day of positivity and hope was more subdued than it perhaps should have been given Covid-19 social distancing measures, but was perhaps fitting given the abnormal trials and tribulations the project overcame to become Colombia’s biggest producing underground gold mine.

Buritica today is an example of modernity and the power of investment with two, 5x5-meters tunnels driven into the orebody which is being exploited by a mechanized mining fleet, a far cry from the narrow tunnel into which one walked, doubled over into the Centena mine scratched out of the rock using decades-old methods where the Buritica story began.

Finding an economic deposit and building a mine is a challenging task at the best of times, but Buritica took a superhuman effort to overcome the extraordinary challenges of operating in Colombia.

Ten years ago, reaching the Centena mine meant a thirty-minute mule ride down the precipitous slopes, a journey which almost claimed one worker in the early days whose mule slipped and fell sending him crashing down the slope only to be stopped by barbed wire which left him with thankful for his life and with a gruesome scar on his neck.

The town of Buritica is named after a local cacique who was burned for not revealing to Spanish Conquistadores the source of the gold in the region, a stubbornness and stoicism which has echoed through the ages and characterized the efforts of the project’s promoters to advance it, facing similar aggression from multiple sources along the way.

Continental Gold was the vision of Bob Allen, owner of Grupo de Bullet, who had operated the Centena mine for many years and believed it could be something more.

Having formed Continental Gold in May 2007, he convinced some of the most astute investors in the junior mining space to invest including George Ireland’s Geologic Resource fund and Passport Capital’s Neil Adshead—who subsequently became a key part of the Sprott Natural Resources team—as part of the initial investor group.

Allen named the company Continental Gold because he liked expansive connotation of the name, suggestive of a multinational organization with multiple assets in the hemisphere. The first logo of Continental Gold replicated the globe logo of Continental Airlines, with Allen adamant the company should not adopt a Colombia artifact as a logo as other companies had done, although it subsequently did with the change of management in 2010, adopting the Tolima jaguar man as its central figure.

Allen’s stubbornness and drive were key in the early days when, less than a year old, he funded the company going from his own pocket for more than a year following the 2008 Global Financial Crisis which saw the gold price plunge and the capital markets close.

During this time, he resisted many predatory offers to acquire the company too cheaply, convinced of its underlying value, until the company did a reverse takeover deal with Cronus Resources in early 2010 which brought Ari Sussman into the company as CEO.

“I sent Vic Wall and Greg Hall, and former Placer Dome chief geologist to visit Buritica. After a day in the underground mine they called me and said they think it is Porgera [a large gold and silver mine in Papua New Guinea]. That was the defining moment and they ended up being right,” said Sussman.

Continental debuted on the TSX in April 2020 and the timing could not have been better: the rapid recovery from the GFC propelled the gold price towards what would eventually be record highs in 2011; Colombia was the hottest gold exploration jurisdiction in the world due to the economic opening that accompanied the Democratic Security policy of president Alvaro Uribe and dozens of exploration juniors flooded into the country as Canadian capital markets wanted couldn’t get enough.

These conditions, together with high-grade drill results, enabled Sussman to take Continental from a small mine barely generating enough cash to pay its staff to a billion-dollar market capitalization in little over a year as its share price topped out at C$10.78 barely eight months after listing, before it put out a resource estimate or an economic study.

Sussman hired the best people he could to help him advance the project such as the late geologist Vic Wall as special advisor, who was instrumental in changing the geological interpretation of Buritica from being a mesothermal vein system to a carbonate base metal vein system, which unlocked the door to defining a large resource.

Buritica’s resource grew rapidly from an initial 3.1 million ounces gold equivalent in 2011 to just shy of 9 million ounces in June 2015, and now standing at more than 11 million ounces.

He also hired COO Don Gray fresh from the successful construction of the Escobal silver mine in Guatemala to build the mine, former Cerrejon, CEO Leon Teicher as chair in March 2015, Mateo Restrepo as EVP (and later president) in August 2015 and in 2018, he brought former EVP and COO of Cerrejón Luis Meneses out of retirement as country manager, who brought a very senior manager’s hat to the table which stabilized the company and allowed the construction to proceed without further problems.

Restrepo brought a deep understanding of both the political and private sector spheres having formerly been an advisor to former president Alvaro Uribe and an executive at the Prodeco coal mine.

Teicher was former president and CEO of the Cerrejon coal mine in La Guajira, Colombia, had long experience dealing with government and local community issues, and brought a big mining mindset to the board, the company’s corporate governance and the way it operated. These latter two were to prove instrumental to overcome the many challenges in store for the project.

For Sussman, success was due to the people he hired. “The tenacity of the people involved was the standout considering how complex it is to be first out of the gate for a large gold project in Colombia, pushing forward against the odds and carrying the mining sector on the shoulders of the company. This took really talented people,” he said.

However, Sussman’s don was fund raising. He raised C$28.75 million with the initial public offering and subsequent raises of C$68.4 million in September 2010 on the back of its first reported drill results from Veta Sur of 14.3m grading 446 grams per tonne of gold and 166g/t silver.

A C$86.3 million raising in November 2012 meant the company didn’t have to raise money again for four years, which enabled Continental to weather the bear market without the dilutive financings which destroyed other juniors.

“The 2012 saw us raise at highest share price ever. We were offered a lot more money and I knew the market was at a top and I should have taken more money to reduce dilution later,” he said.

Sussman also raised US$250 million project financing in January 2017, a $109 million investment from Newmont Mining in May 2017 and $175 million in additional project financing in March 2019. In total, he raised at least $800 million for the project over the past ten years.

Ultimately, while setting Continental and Buritica on a path for success, with the prospect of having to return refinance at a time when the Canadian capital markets were viewing Colombia as a jurisdiction with increasing risk Sussman negotiated the sale of the company to China’s Zijin Mining in March 2020 for US$989 million, a surprise to many who had naturally assumed Newmont would eventually upgrade its 19.9% stake in the Continental and buy the company.

Newmont had its hands full digesting its acquisition of Goldcorp on early 2019 and readily sold its Continental stock to Zijin, banking a nice profit. When Zijin inaugurated the mine in October, it said the development cost was $610 million, some 53% more than the February 2016 feasibility estimate of $389 million.

Challenges

Navigating geological and financial market challenges are par for the course for any junior explorer CEO, but these paled compared to the challenges Colombia had in store for the project.

The project repeatedly suffered at the hands of illegality. The high-grade gold is Buritica’s main appeal but also a security risk.

In the early days, gold doré bars were taken by road to Medellin, until bandits held up the truck it was transported in on the road to Santa Fe de Antioquia. From then on shipments were undertaken by helicopter.

High-grade gold trips the greed gene in many individuals and in rural areas of Colombia where the rule of law is often only a paper concept, nefarious things happen.

In 2010, there were no illegal miners or other small-scale miners on the Buritica concessions. They didn’t start appearing until 2012 once the company had published very high-grade drill results.

These became a flood of some 5,000 illegal miners invading the concessions in 2014-2015 with criminal organizations reportedly behind the initiative.

Meanwhile, both the local and national governments did nothing, an attitude that only changed once the illegal miners started killing themselves via unsafe workings practices and the public health calamity in the town of Buritica grew to the extent that they couldn’t ignore it anymore.

The public water system in Buritica collapsed due to the illegal processing plants installed in houses; prices for food and property rocketed which meant many locals could no longer afford basic necessities; there was a spike in the number of sexually transmitted diseases and teen pregnancies in the town as prostitution took off; an increased number of accidents on the narrow road leading to the Pan-American Highway and widespread environmental destruction including mercury contamination, which some local politicians tried to pin on Continental although it had never used mercury.

When the intervention of public forces happened in April 2016, it had nothing to do with the violation of Continental’s economic rights and probably would not have happened at all given the insouciant attitude of Antioquia’s governor at the time, were it not for the astute hire of Mateo Restrepo, who managed to corral and coordinate the various state and national authorities to action, which was partially successful in shutting down and evicting the majority of the illegal miners.

However, the job was left incomplete, which meant some of the illegal invaders remained and the company was forced to formalize them under a curious change of narrative where the criminals were recast as small miners or traditional miners—despite being recent arrivals—via a government process through which the criminal becomes legal, where theft is no longer theft if you complete some forms. Problem solved, for the government at least.

The year before, Continental let go its vice president and legal representative, essentially for acting against the company’s interests. It was believed that he was a key figure in the invasion of the illegal miners, many of whom came from Segovia where he previously worked to liquidate the Frontino Gold Mines company.

After his dismissal from Continental he was arrested in March 2016 in Buritica on suspicion of being one of the organizers of criminal mining in Antioquia, according to former president Juan Manuel Santos.

After his dismissal and prior to his arrest this individual attempted to discredit the company by accusing it of corruption and trying to buy its environmental license by bribing Corantioquia officials.

While no evidence was presented to substantiate this claim, local press ran the story anyway, which cast the company into a political hurricane, particularly given that the Antioquia governor of the moment was Sergio Fajardo, who had taken a stance against private mining companies and who essentially went out of his way to avoid assisting them in any way, such as refusing to sign concession contracts and failing to respond to the Buritica social crisis.

Fajardo’s slogan was “Antioquia, the most educated” which for mining seemed to be implicit acceptance of illegal miners stealing state resources while wreaking environmental destructing and social havoc out of sight in a backwater of the department.

The illegal miners were Antioqueños and voters after all. It is hard to understand failure to support a project which uses the best available mining and environmental technology, advanced water management systems, which now provides 1,243 direct jobs, 1,075 indirect jobs and has contributed tens of millions of dollars to social programs undertaken through strategic alliances with Conservation International and SENA among other organizations, and which will provide a strong source of funding for this department for decades.

Together with SENA, Continental developed an underground mining school which has graduated Colombia’s first female underground miners. Continental started publishing annual sustainability reports in 2017 and has undertaken various environmental protection and restoration projects, invested in local agricultural production capacity through the Future Harvest program, as well as greatly improving the health and education service provision in the town.

The political brouhaha surrounding the false corruption claims delayed Buritica’s environmental permitting by at least a year. With a lack of clarity on the progress of the Corantioquia process and an increase in the size potential of the project which was crossing the permitting threshold, the company changed to permit Buritica with the ANLA national licensing authority as the project became a PINES project of national interest. The project finally received its environmental permit in November 2016.

Just when Continental thought the majority of its challenges were behind hit, its darkest hour was yet to come.

September 2018 witnessed the murder of three local geologists by dissidents of the former FARC terrorist group at the Berlin project in Antioquia, a few short weeks after a mine engineer had been shot dead at Buritica.

The company’s share price fell to a two-year low following the murders and concerns about the broader security situation.

Buritica is a once-in-a-generation gold asset which will underpin the development of the local region for many years. It is also a testament to human will overcoming adversity; of the literal blood, sweat and tears of too many people and large-scale investment, undertaken by foreign companies, which generates benefits that largely remain in Colombia.

It will be a landmark mine in terms of production, mining practices, social development aspects and a healthy financial contributor through taxes and royalties at the national, regional and local level as it produces an annual 253,000 ounces of gold and 466,000-oz of silver.

It took stubbornness and determination to get Buritica into production, overcoming theft, corruption, invasion, criminal gangs and murder in addition to locking horns with often apathetic local and national government which abandoned the company alone to deal with rule of law issues alone.

As the money starts to roll into government coffers from Buritica, including a projected COP$3 trillion (US$786 million) in royalties, one wonders how much better many rural communities in Colombia could be doing if there had have been adequate government support for the dozens of other explorers that came to Colombia a decade ago?

Continental, for example, in 2019 made social and environmental investments totaling COP$14.6 billion and COP$13 billion in purchases from local suppliers.

In 2018, these investments were COP$8.4 billion and COP$11.5 billion respectively, and in 2017 these totaled COP$4.3 billion and COP$4.7 billion.

But looking to the future, the greatest value of Buritica could be setting out a pathway for other projects to follow of how to do advance a gold project into production in Colombia.


Colombia President Ivan Duque, Medellin Mayor Daniel Quintero and Antioquia Governor Aníbal Gaviria on November 30 joined in Bogota at an official signing ceremony guaranteeing finance for Medellin’s newest mass-transit project: the COP$3.54 trillion (US$991 million) Avenida 80 light-rail system.

Under the deal, the Colombian government will contribute COP$2.4 trillion (US$672 million) or 70% of the capital cost, while the city of Medellin will contribute the remaining 30% (COP$1.14 trillion/US$319 million).

Once completed by 2026, the new addition to Medellin’s world-class, zero-emissions mass-transit system – already serving more than 1 million passengers daily -- will extend 13.25-kilometers in length along the crowded Avenida 80 corridor, serving 17 stations in western neighborhoods that house nearly one-third of Medellin’s residents.

The light-rail system will connect with Medellin’s existing “Metro” elevated rail network, a growing network of electric aerial tram lines, the “Metroplus” bus rapid transit lines, “EnCicla” free bicycles, and dedicated bicycle paths throughout the city, all offering clean and relatively efficient alternatives to polluting car and motorcycle transport.

At the Bogota ceremony marking the official launch of the Avenida 80 project, President Duque recalled his childhood in Medellin, “starting with the Boston neighborhood, the neighborhood where my family lived for decades,” he said.

“Today, when I see that this dream [of an Avenida 80 tramway] becomes possible, I also see that this is in harmony with a vision of a country that is not in ideological conflicts. These [public infrastructure] projects are neither of the right wing nor of the left, they are of common sense, of well-being, of the entire community.

“[Likewise], the development of the Software Valley [in Medellin], that is not left or right wing, it is common sense to appropriate technology to transform the community. The entrepreneurial projects and ‘green’ projects that we have been developing are neither from the left nor from the right, they are common sense so that we have a vision of clean growth,” he added.


Colombia’s National Health Institute (INS in Spanish initials) director Martha Ospina announced November 26 that a seroprevalence study of a statistically representative sample of Medellin residents indicates that 27% of people here likely have already been infected with Covid-19 -- and hence show antibodies in their bloodstreams.

While that 27% figure suggests that more than 800,000 people here likely have acquired some level of resistance to Covid-19, the preliminary results shouldn’t be interpreted as indicating that metro Medellin has achieved anything close to “herd immunity,” the INS director warned.

Instead, Medellin metro area residents must continue to wear masks, socially distance and respect all strict health protocols for workplaces, public spaces, transport and home life – with special precautions required for the most vulnerable: people over 60 years old and those with pre-existing health problems, she said.

In comparison to Medellin’s presumed 27% infection level, some 60% of the residents in Leticia (Amazonas department) and 55% of those in Barranquilla have already been infected with Covid-19, the preliminary results indicate, she said.

The full study covers residents of Leticia, Barranquilla, Medellín, Bucaramanga, Bogotá, Villavicencio, Cúcuta, Cali and Ipiales, she added.

Commenting on the preliminary findings, Colombia Health Minister Fernando Ruiz added that “many people in Colombia could have had Covid and been asymptomatic, while other people could have suffered [and might have recovered] from the disease but had not consulted [a doctor or health department], so they were never registered as people who had Covid.”

While those already infected (and now recovered) presumably now have some level of immunity and presumably wouldn’t transmit Coronavirus to others -- at least, right now -- this situation might only be “temporary,” Minister Ruiz cautioned.

The INS study incorporated “a special technique called chemiluminescence, which has an 86% probability of finding a positive result, and the support of the National Administrative Department of Statistics (DANE) for the definition of a representative sample of people in each one of the cities,” Minister Ruiz explained.

For the study, workers from the national and local health secretariats and the INS have been deployed in the nine target cities to take representative samples based upon demographic factors and risk factors.

By December 20, field sample collections in the remaining cities will be completed, with final results due in January 2021, he added.


Colombia President Ivan Duque announced last night (November 25) that the current national regulations aiming to limit Covid-19 infections here will continue through at least February 28, 2021.

The regulations include mandatory mask wearing, social distancing and strict health protocols at all businesses, agencies, in public transport and in public spaces.

While citizens must cooperate in efforts to limit infections, “progress has been made in the multilateral environment in the Covax vaccine program and we are also making progress in the bilateral negotiation processes with pharmaceutical companies,” Duque stated in a nationally televised address.

“We have to avoid at all costs severe outbreaks such as those seen in Europe and some places in North America,” he added.

“We will continue to epidemiologically monitor all behavior in our country, following all the indicators and of course making all the necessary prevention decisions and alerting where cases of increases are seen.

“We are also advancing in the development of vaccination programs, since Colombia also participates as a member of the directing council of the World Health Organization and the Pan American Health Organization.,” he added.

Free Vaccinations

Meanwhile, Colombia’s Health Minister Fernando Ruiz added during the same nationally televised program that the first Covid-19 vaccines will become available in Colombia during the first half of 2021.

The initial vaccination campaign would take “three months, initially covering health workers, those over 60 years of age and the population with co-morbidities,” Ruiz stated.

Population groups that are less-likely to suffer mortality from Covid-19 “could have access to the vaccine in 2022,” according to the Minister.

Once the first groups of higher-risk persons are vaccinated, “then the second phase would come, which seeks to generate herd immunity by vaccinating between 50% and 60% of the rest of the population,” according to the Minister.

Colombia doesn’t have any plan to charge anyone -- even including higher-income groups (strata five and six) -- for vaccinations, he added.

To date, negotiations with pharmaceutical companies have generated commitments to enable initial vaccinations of 15 million people here, he said.

“We have previously signed a confidentiality agreement with Pfizer and with other companies,” he added. The Ministry also has confidentiality agreements with vaccine developers in China and India, he revealed.

Second-Half 2021 Expansion

Meanwhile, Gina Tambini, Colombia’s official delegate to the World Health Organization (WHO) and the Pan American Health Organization (PAHO), explained that various drug developers world-wide have to date created more than 200 candidate vaccines.

Of those 200, 77 are in early-stage trials, while another 10 are already in “phase three” clinical trials, she said.

Colombia is part of the “Covax” cooperative-development and distribution program, which aims to produce and distribute some 2 billion doses of vaccines world-wide, she noted.

Through that program, “it is expected and projected that in the middle of the year 2021 -- between the third and fourth trimesters -- vaccines will be available to apply to the [global] population,” she said.

The Covax program already includes a portfolio of nine vaccines, three of which are already in “phase three” trials, including the AstraZeneca laboratory vaccine (University of Oxford); a vaccine from the Moderna laboratory; and another from the Novavax laboratory, she added.


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About Medellin Herald

Medellin Herald is a locally produced, English-language news and advisory service uniquely focused upon a more-mature audience of visitors, investors, conference and trade-show attendees, property buyers, expats, retirees, volunteers and nature lovers.

U.S. native Roberto Peckham, who founded Medellin Herald in 2015, has been residing in metro Medellin since 2005 and has traveled regularly and extensively throughout Colombia since 1981.

Medellin Herald welcomes your editorial contributions, comments and story-idea suggestions. Send us a message using the "contact" section.

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