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Published in general news Written by November 29 2019 0

South Africa-based global mining giant AngloGold Ashanti on November 28 unveiled more details of its proposed "Quebradona" copper-gold mining project at Jerico, Antioquia -- including a novel "Biodynamic" nature park that would restore and improve the entire mining area, as part of its just-filed environmental impact assessment (EIA).

AngloGold first unveiled the scheme at the Colombia Gold Symposium (CGS) November 12 here in Medellin, where environmentally and socially responsible mining took front-and-center stage -- outshining even the usual presentations on geology, politics and legalities.

Why this scheme is so important: If the new, socially/environmentally responsible miners succeed in convincing a wider public, then Antioquia and Colombia could look forward to billions of dollars of new investments, big jumps in tax-and-royalty revenues, new jobs and business opportunities, infrastructure improvements, educational advancements, government fiscal solvency -- and even (amazingly) environmental progress.

The "Quebradona" project would become Colombia’s biggest copper-and-gold mine at pastoral Jerico, Antioquia – while actually improving the local environment via post-mining construction of a remarkable “Biodynamic” nature park.

The repercussions could be seen as almost biblical, as AngloGold potentially could become something like a 21st-century version of “Joshua” at the battle of Jerico -- where anti-mining walls could come tumbling down.

According to the company, "after a rigorous process that included more than 14 years of studies of the subsoil and on the social, economic and environmental characteristics of Jericho, Antioquia, AngloGold Ashanti began the process of filing the EIA with the environmental authorities of the departmental and national governments for the Quebradona copper mining project, with which the route to obtain the environmental license for the project begins.

"To construct the study, the company carried out exhaustive analysis and projections by 27 expert consultants in geology, hydrology, ecology, among other specialties. Also, between November 2018 and September 2019, AngloGold heard the concerns of more than 2,600 inhabitants of Jericho through 150 meetings, in order to raise solutions in the same document."

“The exhaustive analysis and dialogue with the community, together with the advanced technology that we plan to use in the project, allow us to have the certainty that the EIA not only integrates the components required by the authorities to ensure compliance with the technical specifications and social and environmental obligations of the project, but reflects high international standards of sustainable mining to ensure that it meets the purpose of converting the mineral wealth of the territory into social, economic and environmental progress,” added Felipe Márquez Robledo, president of AngloGold Ashanti Colombia.

In response to public concerns, AngloGold Ashanti integrated into the EIA a "gradual regeneration plan of 2,550 hectares of tropical dry forest and high mountain forest of Jericho," according to the company.

"The investment includes improving the connectivity of fauna and flora in the ecological corridor between the Cauca river, the escarpment area, the Piedras river, the Quebradona ravine basin, the integrated management district (Distrito de Manejo Integrado, DMI) of the Cuchilla-Jardín-Tamesis region, and the La Guamo ravine basin, in such a way that wildlife species recover mobility between ecosystems and increase native plant cover that will generate food and cover that can be used by birds in the region.

"The EIA also ratifies AngloGold Ashanti's commitment not to use the water that supplies the Jerico municipality. In the construction and operation [of the mining project], the company will use less than 1% of the [nearby] Cauca River water -- and recirculation [of that Cauca water] will be 80% in the process circuit," according to the company.

Worried environmentalists, some local farmers and some townspeople in Jerico have been fighting the proposed “Quebradona” mine for years, fearing potential water, air and noise pollution, ugly land subsidence and possible increases in local crime and prostitution. In addition, the politically powerful, Medellin-based "Comfama" social-benefits organization has expressed concerns that the new mine might cause undue pollution or other harm to its proposed "Ecoparque Turístico Los Farallones de La Pintada" ecopark nearby.

But the Colombian Constitutional Court recently ruled that local governments (including Jerico) can’t by themselves ban mining – although the Court also said that the national government ought to consult with local governments before issuing mining licenses and environmental permits. Colombia’s Congress is supposed to enact a new law defining this consultative scheme.

Meanwhile, two recent Antioquia court rulings have nullified prior Jerico ordinances that would have prohibited mining.

Just as significant, the newly elected Mayor of Jerico -- David Alonso Toro Cadavid – publicly announced that if the national government ultimately approves “Quebradona” licenses, then the local government will do everything it can to ensure an environmentally and socially responsible project.

AngloGold’s upcoming license application to Autoridad Nacional de Licencias Ambientales (ANLA, the national environmental licensing agency) is expected to be filed within weeks, according to the company.

Prior to that filing, AngloGold’s “Quebradona” mining project manager Ingrid Suarez and AngloGold Colombia corporate affairs manager Juan Camilio Quintero unveiled to CGS 2019 a startling, English-language animated film showing how the mine would be built, operated, safely closed and then repurposed into an environmentally friendly, 2,548-hectares-wide biopark – without polluting water, land or air, or causing any disastrous surface subsidence.

Rather than just generating profits for AngloGold, the “Quebradona” project aims to generate “social wealth for Jerico, Antioquia and Colombia,” along with “environmental regeneration,” Quintero stated here.

Bonus: The company will put US$2.5 million/year into “Fundacion ProJerico” for social development schemes.

The project design includes avoidance of noise or air pollution -- partly by employing underground processing of extracted rock -- and putting tailings adjacent to an existing, non-native pine-tree plantation – all of which eventually will be replanted with native species and reconnected to biological corridors that previously have been ruined by local deforestation.

The project entails four years of construction, 24 years of productive mining, 10 years of closure work and construction of the “Biodynamic” park, which will include bird-watching towers, an educational laboratory to promote conservation and native species, solar and wind turbines for zero-emissions electric power, and restoration of tropical dry forest.

The “Quebradona” project is located about three kilometers from the Puente Iglesias bridge over the Cauca river, from which 0.25 cubic meters per second of water will be withdrawn for the mine processing works, according to Suarez.

Sediment ponds from mine extractions and processing will feature effluent treatments to ensure that water returning to the Cauca river will meet stringent environmental limits, according to the company.

Tailings will include filtration systems to ensure that any possible water migration to nearby streams wouldn’t be acidic, she said. Plugging of ventilation shafts will avoid water filtration through the mine post-closing. Other systems will be employed to minimize noise, dust and light pollution during the term of mine operations.

Published in general news Written by November 29 2019 0

The U.S. Agency for International Development (USAID) office in Colombia on November 28 issued an update on a joint USAID-Antioquia governmental program that is restoring 1,781 hectares of lands wrecked by criminal and illegal mining.

To date, the US$4 million project has planted 2 million trees on deforested lands and established 12,000 beehives for honey production in the same areas.

The “Legal Gold” project is benefiting the Antioquian municipalities of Caucasia, Cáceres, El Bagre and Zaragoza, supported by the departmental government of Antioquia, local mayors and private companies including Medellin-based, socially responsible gold miner Mineros SA.

“It is estimated that the illegal exploitation of gold in Bajo Cauca Antioqueño has caused the degradation of 32,000 hectares of land where it is not feasible to develop [conventional] economic activities that benefit the communities, which means that, in addition to the environmental liability, the lands have been become social liabilities,” according to USAID.

“In spite of this panorama, the union of efforts and inter-institutional resources is returning the life to about 8% of the total degraded area of the Lower Cauca Antioqueño through Acacia mangium plantations.

“This forest species, in addition to adapting to difficult soil conditions, enjoys accelerated growth, fixes nitrogen in the soil and produces abundant organic matter and floral and extra-floral nectar that serve as food for honey bees.

“After three years of the establishment of the projects, which linked families in the area of influence, the degraded, dusty and rocky soils [supported] plantation regrowth, and fauna returned to these territories."

The related beekeeping project -- which benefits 350 local families -- "is considered to be the largest that has been established in Colombia," USAID added.

“In these apiaries, 91 tons of honey have been harvested and an estimated production of 380 tons per year is estimated when the hives are at their maximum production peak.

“The recovery of soils degraded by illegal mining is undoubtedly replicable in other regions of the country and the world. This project improves the environmental conditions of the areas, generates rural employment and contributes to the reduction of poverty rates and improvement of the quality of life of the communities,” USAID added.

Published in general news Written by November 22 2019 0

In contrast to rock-throwing against police and vandalism to buildings and infrastructure in Bogota and Cali -- following otherwise peaceful, well-organized November 21 nationwide protest marches -- Medellin once again demonstrated to all Colombia that peaceful protest in a democracy effectively advances civil reform.

Immediately taking note of that was Colombia President Iván Duque Márquez, who publicly hailed marchers in Medellin and elsewhere for avoiding the mindless vandalism that broke out at the conclusion of otherwise peaceful marches.

Duque praised the peaceful protesters -- and promised multi-party negotiations to work out upcoming, potential reforms to pensions, employment-stimulation programs and other demands raised by marchers.

In contrast to the counter-productive vandalism in Bogota, some participants in the peaceful protest march in Medellin actually surrounded and stopped “encapuchados” (hooded vandals) from attacking buildings along the march route, as noted by both President Duque and Medellin Mayor Federico Gutierrez (see video here: https://twitter.com/i/status/1197615386520363019).

“What is better [anti-crime] control than that by citizens?” Gutierrez noted in a post-march tweet. “Congratulations and thanks to those who prevented vandalism. What great behavior! How proud we are for Medellin!”

In a nationwide address following the marches, President Duque stated: “Colombians spoke today. I will not get tired of saying it: we are a government that listens and builds.

“We understand that peaceful protest is legitimate in a democracy. And that throughout history there have been frustrations that we must resolve and that we have been attending.

“Today, despite the acts of violence, attributable to vandals that do not represent the spirit of Colombians, we show that this country can exercise individual freedoms without violating the freedoms of others.

“That is why I want to highlight the attitude of the citizens who rejected the vandals and made it clear that to express onself, one does not need to resort to violence.”

Just prior to the protest marches, Colombia’s Labor Minister Alicia Arango stated in a televised panel discussion that in contrast to false claims made by several organizers of the protest marches, “this government has never thought of lowering the minimum wage and even less so for young people.”

“There is not a single [government proposal] written on labor and pension reforms, and this is because if this possibility is analyzed, then it must go through the Labor Agreement Board,” which includes labor unions, employer organizations and government regulators, she added.

In contrast to fake news being spread by left-wing propagandists, Arango pointed out that the Duque administration is actually increasing subsidy payments to the poorest retirees in Colombia – a program created by the current administration since January 1, 2019.

As for creating more first-time job opportunities for young people, Arango pointed out that the Duque administration’s National Development Plan now allots 10% preference for new public-sector jobs for young people between 18 and 28 years old.

In addition, the Colombia minimum wage was boosted by 6% this year -- the largest hike in 25 years -- while the transport subsidy rose 10% for lower-income workers, the biggest increase in 14 years.

As for the state-run Colpensions pension fund (roughly similar to the U.S. Social Security system), in contrast to fake news claims, “Colpensiones will not be eliminated,” Arango said.

“On the contrary, it will be strengthened and become the central axis of economic protection for old age” added Colpensiones president Juan Miguel Villa, who participated with Arango in the public presentation.

 

Published in general news Written by November 19 2019 0

In a November 12 keynote presentation to the fourth annual Colombia Gold Symposium (CGS) here in Medellin, CGS founder Paul Harris pointed to a recent study showing a drastic decline in mining concession contract applications in Antioquia – the heartland of Colombia gold mining.

According to the study by Colombia-based consultant Portex, the number of mining applications being signed into concession contracts in Antioquia fell from 669 in the 2004-to-2007 period, to 243 in 2008-2011, then 35 in the 2012-to-2015 period, and finally none at all in the 2015-to-2018 period.

Antioquia is the only department in all Colombia that has its own mining authority, Harris noted.

But the Portex study “has shown the delegated authority the regional government enjoys for contracting and supervision is not achieving the goals of decongestion, efficiency, efficacy and fomenting the development of mining and exploration,” as Harris explained in his recent column in the Colombia Gold Letter magazine.

The Portex study found that Antioquia state missed-out on COP$24 billion pesos (US$6.9 million) in government revenues as a result of concession applications not being advanced to signed contracts.

What’s more, another US$173 million per year in capex was lost here because mining companies – lacking concession contracts – didn’t invest in exploration here, Harris noted.

“Unfortunately, the amount of territory which is effectively frozen because concession applications were neither granted nor rejected grew 22.7% annually from 2001 to 2018 from a total of 8,399 hectares to 1,772,948 hectares,” Harris concluded in his report.

The Upside: Higher Quality Mining

On the other hand, positive mining developments are emerging in Antioquia specifically, Colombia generally and also in next-door neighbor Ecuador, Harris noted in his CGS presentation.

Two of these developments include the relatively huge Continental Gold project at Buritica, Antioquia (due for start-up in 2020), and the potential for a giant copper-gold mining project by AngloGold Ashanti in Jerico, Antioquia (see related reports in Medellin Herald, November 18, 2019).

Big new projects for gold and copper mining here are partly a commercial response to a global rebound in metals prices. But the new projects also are gathering strength because governments see metals-mining as a new source of tax-and-royalty revenues -- in the wake of sharp declines in global oil prices and the resulting drop-off in oil-tax revenues, he noted.

In Colombia alone, gold discoveries in recent years could represent a US$94 billion bonanza for government tax-and-royalty revenues, he said.

While some local communities have blocked mining because of environmental concerns -- and Colombian courts sometimes have intervened to hinder some projects -- mining companies also share some of the blame for relatively slow progress in moving projects to commercial operation, he said.

“There have been clumsy community relations efforts by mining companies,” Harris noted here. “People fear mining and don’t understand the benefits. Mining is particularly unloved.”

Some leading global mining execs echo that sentiment, as for example Barrick Gold’s CEO, who recently stated that the “social license” for mining is more pressing than most other issues.

In a related CGS presentation here, Silvana Habib, president of Colombia’s Agencia Nacional de Mineria (ANM, the national mining agency), cited an urgent need for environmentally and socially responsible mining, which she dubbed “Mineria 4.0.”

Excessive government bureaucracy also has been partly to blame for slowing project development here, Habib conceded. Which is why ANM recently developed a “single application platform” for mining applications, employing a computerized system developed in Canada, one of the world’s top mining giants.

The new platform – incorporating both environmental and technical requirements -- can cut the former 325-days-long applications process to 90 days, a 72% reduction, she said.

Asociacion Colombiana de Mineria (ACM) trade-association president Juan Camilo Nariño added here in a separate presentation that mining is the single-largest contributor to health, education and infrastructure funding in Colombia.

While environmental advocates frequently assert that mining is a big threat, Colombia’s legal mining companies (as opposed to the criminal miners) are big spenders on environmental controls, much of which is required by government regulations, Nariño explained.

Future gold-and-copper mining projects could bring billions of dollars of investment and revenues for Colombia -- potentially boosting mining’s contribution to gross national product (“PIB” in Spanish initials) from 1.9% currently to 2.7% over the next decade, he added.

Consultant Warnings

While potential exists for more responsible mining development in Antioquia and Colombia, national elections last month also raise cautionary flags, as Bogota-based consultant Raul Gallegos of Control Risks warned here.

A recent rise of populist governments in Latin America is having a knock-on impact on Colombia as well, even though moderate conservative Ivan Duque handily won last year’s presidential election here.

In addition, Antioquia just elected a relatively mining-friendly governor (Anibal Gaviria) -- and recent Antioquian court rulings indicate relative tolerance to mining projects here, he added.

Still, some mining projects in Colombia likely will continue to face several legal challenges, protests and (sometimes) violent clashes -- with many politicians “deferring to [anti-mining] activists,” he warned.

Any company that attempts to steer-around such opposition by allying with corrupt politicians could face disastrous damage to corporate reputation, he added.

In a related presentation here, Colombia Risk Analysis consultant Sergio Guzman pointed to recent violent citizen protests in Chile, Ecuador and Bolivia – along with a leftward political U-turn in Argentina – as a possible opportunity for Colombia to attract investors fleeing from chaos elsewhere.

Colombia’s recent elections indicate that more voters are moving away from left- or right-leaning parties, in favor of more-centrist leaders focused upon concrete results rather than political posturing.

As a result, President Duque “needs to reach out to independents and other parties” in order to ensure that socially and environmentally responsible projects, reforms and policies will indeed move forward.

If political stability and moderation indeed gather steam, then “mining will be key driver of the Colombia economy over the next few years,” Guzman added.

Concluding the CGS agenda, Colombia’s top environmental scientist Brigitte Baptiste (former director of Instituto Humboldt) recounted the many social, political and environmental challenges facing miners not only here in Colombia but world-wide.

But even with those challenges, Baptiste added that “mining can be part of many sustainable activities” -- and it has vastly less negative global impact than deforestation for cattle ranching and agriculture.

To respond to criticism from environmentalists and other concerned citizens, “you have to be more detailed with your answers today,” in an era cluttered with sensationalist fake news and purely ideological opposition to mining, she explained.

While many environmental groups find the idea of negotiating with mining developers and government regulators “not acceptable,” such dialogue is the “only way to achieve a balance of interests and economic development for the country,” she said.

Combining new mining projects with environmental offsets such as bioparks, private reserves, municipal and regional planning initiatives, new ecotourism reserves and better mining practices are among the options for achieving such balance, she said.

“We need to legalize [responsible] mining and get rid of illegal mining,” Baptiste concluded.

Published in general news Written by November 18 2019 0

South Africa-based global mining giant AngloGold Ashanti on November 28 unveiled more details of its proposed "Quebradona" copper-gold mining project at Jerico, Antioquia -- including a novel "Biodynamic" nature park that would restore and improve the entire area, as part of its just-filed environmental impact assessment (EIA).

AngloGold first unveiled the scheme at the Colombia Gold Symposium (CGS) November 12-13 here in Medellin, where environmentally and socially responsible mining took front-and-center stage -- outshining even the usual presentations on geology, politics and legalities.

Why this scheme is so important: If the new, socially/environmentally responsible miners succeed in convincing a wider public, then Antioquia and Colombia could look forward to billions of dollars of new investments, big jumps in tax-and-royalty revenues, new jobs and business opportunities, infrastructure improvements, educational advancements, government fiscal solvency -- and even (amazingly) environmental progress.

The "Quebradona' project would become Colombia’s biggest copper-and-gold mine in pastoral Jerico, Antioquia – while actually improving the local environment via post-mining construction of a remarkable “Biodynamic” nature park.

The repercussions could be seen as almost biblical, as AngloGold potentially could become something like a 21st-century version of “Joshua” at the battle of Jerico -- where anti-mining walls could come tumbling down.

According to the company, "after a rigorous process that included more than 14 years of studies of the subsoil and on the social, economic and environmental characteristics of Jericho, Antioquia, AngloGold Ashanti began the process of filing with the environmental authorities of the departmental and national agencies of the EIA for the Quebradona copper mining project, with which the route to obtain the environmental license for the project begins.

"To construct the study, the company carried out exhaustive analyzes and projections by 27 expert consultants in geology, hydrology, ecology, among other specialties. Also, between November 2018 and September 2019, AngloGold heard the concerns of more than 2,600 inhabitants of Jericho through 150 meetings, in order to raise solutions in the same document."

“The exhaustive analysis and dialogue with the community, together with the advanced technology that we plan to use in the project, allow us to have the certainty that the EIA not only integrates the components required by the authorities to ensure compliance with the technical specifications and social and environmental obligations of the project, but reflects high international standards of sustainable mining to ensure that it meets the purpose of converting the mineral wealth of the territory into social, economic and environmental progress, ” added Felipe Márquez Robledo, president of AngloGold Ashanti Colombia.

In response to public concerns, AngloGold Ashanti integrated into the EIA a "gradual regeneration plan of 2,550 hectares of tropical dry forest and high mountain forest of Jericho," according to the company.

 "The investment includes improving the connectivity of fauna and flora in the ecological corridor between the Cauca river, the escarpment area, the Piedras river, the Quebradona ravine basin, the integrated management district (Distrito de Manejo Integrado, DMI) of the Cuchilla-Jardín-Tamesis region, and the La Guamo ravine basin, in such a way that wildlife species recover mobility between ecosystems and increase native plant cover that will generate goods and services that can be used by birds in the region.

"The EIA also ratifies AngloGold Ashanti's commitment not to use water that supplies the Jerico municipality. In the construction and operation [of the mining project], the company will use less than 1% of the Cauca River water -- and recirculation [of Cauca water] will be 80% in the process circuit," according to the company.

 

Worried environmentalists, some local farmers and some townspeople in Jerico have been fighting the proposed “Quebradona” mine for years, fearing potential water, air and noise pollution, ugly land subsidence and possible increases in local crime and prostitution. In addition, the politically powerful, Medellin-based "Comfama" social-benefits organization has expressed concerns that the new mine might cause undue pollution or other harm to its proposed "Ecoparque Turístico Los Farallones de La Pintada" ecopark nearby. 

But the Colombian Constitutional Court recently ruled that local governments (including Jerico) can’t by themselves ban mining – although the Court also said that the national government ought to consult with local governments before issuing mining licenses and environmental permits. Colombia’s Congress is supposed to enact a new law defining this consultative scheme.

Meanwhile, two recent Antioquia court rulings have nullified prior Jerico ordinances that would have prohibited mining.

Just as significant, the newly elected Mayor of Jerico -- David Alonso Toro Cadavid – publicly announced that if the national government ultimately approves “Quebradona” licenses, then the local government will do everything it can to ensure an environmentally and socially responsible project.

AngloGold’s upcoming license application to Autoridad Nacional de Licencias Ambientales (ANLA, the national environmental licensing agency) is expected to be filed within weeks, according to the company.

Prior to that filing, AngloGold’s “Quebradona” mining project manager Ingrid Suarez and AngloGold Colombia corporate affairs manager Juan Camilio Quintero unveiled to CGS 2019 a startling, English-language animated film showing how the mine would be built, operated, safely closed and then repurposed into an environmentally friendly, 2,548-hectares-wide biopark – without polluting water, land or air, or causing any disastrous surface subsidence.

Rather than just generating profits for AngloGold, the “Quebradona” project aims to generate “social wealth for Jerico, Antioquia and Colombia,” along with “environmental regeneration,” Quintero stated here.

Bonus: The company will put US$2.5 million/year into “Fundacion ProJerico” for social development schemes.

The project design includes avoidance of noise or air pollution -- partly by employing underground processing of extracted rock -- and putting tailings adjacent to an existing, non-native pine-tree plantation – all of which eventually will be replanted with native species and reconnected to biological corridors that previously have been ruined by local deforestation.

The project entails four years of construction, 24 years of productive mining, 10 years of closure work and construction of the “Biodynamic” park, which will include bird-watching towers, an educational laboratory to promote conservation and native species, solar and wind turbines for zero-emissions electric power, and restoration of tropical dry forest.

The “Quebradona” project is located about three kilometers from the Puente Iglesias bridge over the Cauca river, from which 0.25 cubic meters per second of water will be withdrawn for the mine processing works, according to Suarez.

Sediment ponds from mine extractions and processing will feature effluent treatments to ensure that water returning to the Cauca river will meet stringent environmental limits, according to the company.

Tailings will include filtration systems to ensure that any possible water migration to nearby streams wouldn’t be acidic, she said. Plugging of ventilation shafts will avoid water filtration through the mine post-closing. Other systems will be employed to minimize noise, dust and light pollution during the term of mine operations.

Published in general news Written by November 14 2019 0

Colombia’s Controller General (Contraloria General de la Republica, CGR) Carlos Felipe Córdoba Larrarte announced November 14 that his agency has opened an investigation into two former Medellin Mayors, two former Antioquia Governors and three EPM representatives potentially responsible for construction errors and financial losses resulting from the collapse of a diversion tunnel last year at the US$5 billion “Hidroituango” hydroelectric project.

The decision to probe the former politicians, EPM officials and “Hidroituango” board members – including 29 others involved in the construction – comes on the heels of a CGR announcement in September determining that EPM could lose as much as US$1.17 billion in certain revenues and costs resulting from that tunnel collapse (see Medellin Herald September 20, 2019).

Immediately following the November 14 CGR announcement, EPM general manager Jorge Londoño de la Cuesta stated that EPM hasn’t yet been notified of the probe, but will cooperate with the investigation.

While the CGR didn’t name which politicians or officials are under investigation, the press release implicitly excludes current Medellin Mayor Federico Gutierrez and current Antioquia Governor Luis Perez.

Incoming Governor Anibal Gaviria was a Medellin Mayor during the time-frame cited in the CGR probe, as was former Medellin Mayor Alfonso Salazar.

Former Governors Luis Alfredo Ramos and Sergio Fajardo (another former Medellin Mayor) also were serving as Antioquia Governors during the time cited in the probe, as noted in a report by Colombian daily newspaper El Tiempo.

Former EPM general manager Juan Esteban Calle and current general manager Londoño de la Cuesta also would face questioning, along with former EPM and Hidroituango project board members.

The CGR announcement states that Hidroituango losses would include COP$2.97 trillion (US$860 million) in “loss or destruction of value of the project” as well as another COP$1.1 trillion (US$318 million) “due to resources no longer received by the government as a result of the non-operation of the hydroelectric plant,” which originally was supposed to have started-up at end-2018 -- initially at one-quarter (600-megawatts) of its eventual 2.4-gigawatts capacity.

EPM now estimates that first power output (at 600-MW) won’t happen until end-2021, three years after the original, planned start-up – hence costing hundreds of millions of dollars in lost power sales.

The CGR report alleges that missteps in Hidroituango construction, engineering and spending decisions were “not justified, because they obeyed the need to address situations that arose as a result of serious problems in the planning and execution of the project, attributable to improvisation and the lack of follow-up and control of the related parties as presumed responsible.

“These greater unjustified investments destroyed the value of the project as it was conceived from its baseline, thus generating damage to the state’s assets [including its part-owners: the city of Medellin and the Department of Antioquia] in the form of impairment or loss.

“In turn, as a result of the non-operation of the hydroelectric plant [that is, at the initial December 2018 start-up deadline], due to the unjustified increases in the work schedule, which were due to planning problems and construction errors, damage to the state’s assets was generated in the form of impairment,” according to the CGR report.

“After completing the respective notification process of this opening order, the CGR’s Office of the Intersectorial Comptroller Delegate No. 9 of the Unit of Special Investigations against Corruption will proceed to cite the alleged perpetrators,” according to CGR.

“After this process, the Office of the Comptroller General of the Republic will proceed to make the corresponding decision” on whether to impute charges or dismiss the case.

Published in general news Written by November 08 2019 0

Medellin-based electric power giant EPM on November 8 debuted a new, 550-meters-long highway atop its US$5 billion “Hidroituango” hydroelectric dam – and almost simultaneously highlighted numerous social reconstruction projects in communities affected by a May 2018 flood downstream of the dam.

The highway on top of the new dam -- which spans the Cauca River just upstream of Puerto Valdivia -- connects with 23 kilometers of newly built, adjoining highways between neighboring communities around the town of Ituango, according to EPM.

The new highway from the Toledo valley runs along the right bank of the Cauca River reservoir (behind the dam) to the western portal of a new road tunnel, then crosses the dam along its crest and, on the left side, continues its route to El Bombillo-- and from there towards the urban center of Ituango.

Social Recovery Projects

Meanwhile, in response to damage from last year's flood, EPM also touted the upcoming construction of a new “Simon Bolivar” bridge in the municipality of Valdivia. On a related front, in the municipality of Tarazá , EPM launched improvements to the structure of the “El Doce” bridge -- aiming to ensure structural conditions “superior to those that existed before,” according to the company.

“Parallel to these interventions, upgrades were completed in seven of 11 [nearby] educational institutions: Nutabes, La Paulina, Playa Rica, Puquí, Zorras, Marco A. Rojo and Cachirimé, [as well as] El Pescado , Barca Cautiva, Puerto Nery and Palomas, [the latter four of which] will be upgraded under a social contracting strategy with each community action board,” according to EPM.

“Other works of greater amplitude are the El Turcó and Palestine bridges which are waiting for environmental permits to advance the contractual process. In addition, [there will be construction of] an integrated community center and a health clinic in a lot that EPM acquired from the National Narcotics Directorate. The start of these constructions is planned for the second half” of 2020, according to the company.

On a related front, of the 2,250 residents of Puerto Valdivia evacuated last year because of the temporary flood, 1,908 (85%) have returned to the area. EPM is continuing projects to restore and refurbish damaged homes, businesses and public spaces, according to the company.

“Progress is being made in the process of recognizing impacts to formal and informal economic activities, as a result of preventive evacuation in Puerto Valdivia,” according to EPM. “To date, 163 complaints [from affected persons] have been processed, of which 126 have accepted [EPM’s compensation] offers. A total of 112 merchants [also] have received agreed-to payments from EPM,” the company added.

Published in general news Written by October 28 2019 0

Voters in Medellin and the surrounding Antioquia department on October 27 continued a long tradition of electing relatively young, energetic, politically moderate mayors along with older, more-experienced governors who are more interested in delivering practical, concrete results rather than poseurs flaunting left-wing or right-wing flamboyance.

Relative newcomer Daniel Quintero Calle – an independent and technocrat who supports continuation of EPM’s giant “Hidroituango” hydroelectric project but questioned EPM’s management – took 38.56% of the Medellin vote for Mayor, beating politically moderate Centro Democratico candidate Alfredo Ramos, son of a former Antioquia governor, who nabbed 29.88% of the vote.

Quintero publicly rejected attacks coming from former Colombia President Alvaro Uribe (leader of Centro Democratico) but simultaneously denounced an endorsement from left-wing politician Gustavo Petro, who was soundly defeated by moderate conservative Ivan Duque in last year’s Colombian presidential elections.

Meanwhile, politically moderate Anibal Gaviria Correa – who won the support of numerous political parties including Liberal, Cambio Radical, La U and Alianza Verde, and likewise supports continuation of the Hidroituango project – got 35.97% of Antioquia’s votes for Governor, beating similarly moderate Centro Democratico candidate Andres Guerra, with 28.78% of the vote.

While Centro Democratico came in second in the Mayor’s and Governor’s races, it nevertheless won the majority of City Council seats and a plurality of Antioquia departmental seats, ensuring that compromise and moderation will continue to dominate Medellin and Antioquia politics.

Published in general news Written by August 21 2019 0

A new report from Medellin-based think-tank Proantioquia shows that the Medellin metro area and the surrounding Antioquia department must redouble efforts to boost industrial specialization, public education, public health and transport infrastructure in order to meet the challenges of the coming decade.

The report (see: https://www.proantioquia.org.co/wp-content/uploads/2019/07/desafios-y-oportunidades-competitividad.pdf) identifies and examines problems and opportunities in several crucial areas: industrial specialization, people-skills development, environmental protection, economic advancement, specialized education, infrastructure development, public health funding, public security and the “peace process” with guerilla/criminal groups.

As for industrial specialization, the report cites a study by Colombia’s national statistical agency (DANE) indicating that Antioquia had a specialization index rating better than the national average, at 1.07.

But in a separate, related study by Colombia’s national economic planning department (DNP), Antioquia came in eighth place over-all in industrial specialization in 2018 -- better than the 10th place showing in 2017, but still below the rankings of Bolívar, Santander, Cauca, Valle del Cauca, Atlantico, Boyaca, and Caldas (see chart, above).

DANE statistics show that 16% of Antioquia’s gross domestic product (“PIB” in Spanish initials) comes from industry – far above the 12% of PIB that industry contributes to Colombia’s economy nationally, the report notes.

Even so, Antioquia lags far behind the 42.7% PIB contributed by industry in China or the 23.4% PIB from industry in Brazil, the report notes.

However, greater promotion of technological innovation could help boost Antioquia’s industrial PIB, the report concludes.

As an example, Medellin’s “Ruta N” technology center could help lead the charge by promoting and sponsoring more high-tech forums such as TEDx Medellin, “Charlas N,” the Start-up Forum and Fair, Innovation Land and others, according to the Proantioquia report.

The Antioquia departmental government and local Chambers of Commerce could help subsidize and organize more such events beyond just Medellin, the report adds.

As for science, technology and innovation (STI) development, the city of Medellin ought to dedicate at least 7% of its annual profits received from public utility EPM for STI partly at Ruta N, according to the report.

Such funds also could go for student scholarships in public schools and local/international university studies, with a special educational focus related to Medellin and Antioquia’s “clusters” of strategic industries including those tied to “global value chains,” according to the report.

Medellin's strategic clusters today include sustainable energy, fashion/textiles, advanced manufacturing, business tourism, digital businesses, health/medical business and sustainable habitats. Beyond Medellin, Antioquian strategic clusters already include coffee, cacao and dairy products, the report notes.

Infrastucture Deficit: Build More Highways

Recent studies by DANE and Colombia’s private-sector Competitiveness Council show just how far behind Antioquia still remains in building crucial transport networks in and through its mountainous terrain for connection to Atlantic and Pacific ports.

As a result, Antioquia ranks 19th among Colombia’s 26 departments in kilometers of primary highway per 100,000 inhabitants, and 14th in secondary highways per 100,000 inhabitants, the report shows.

A related study by Colombia’s national business trade group ANDI (Association Nacional de Empresarios) shows that Colombia’s industries in interior cities including Medellin and Bogota suffer by paying two-to-four-times as much as neighboring Latin American countries to move standard 40-feet-long containers to and from ocean ports.

What’s more, Antioquia ranks a poor 19th among all Colombian departments in average transport costs to-and-from major ports, or 21% higher cost than the national average, the study shows. Antioquia shipping costs recently averaged about US$34 per ton, or US$1,484 per container, versus just US$13.87 per ton in Boyaca, the report shows.

However, the now-under-construction “fourth generation” (4G) highways including Pacifico 1 & 2, Mar 1 & 2, and “Regional Norte” in Antioquia would dramatically reduce logistical costs, the study notes.

Public Health Cost Problem: Savia Salud

Meanwhile, Antioquia faces another huge cost problem: Savia Salud, Colombia’s single-biggest “mixed” public-private health network, which covers most of the poorest populations.

Savia Salud arose from the bankruptcy and collapse of several other subsidized “EPS” networks, which roughly resemble the “HMO” and “PPO” networks in the USA.

As the report notes, far too many people pay little or nothing for ever-more-complex, ever-more-expensive health services in Antioquia.

Colombia’s national government provides billions of dollars of subsidies for the “subsidized” (poorest) patients and the uninsured, while workers and employers help offset some of these costs in the parallel “contributory” EPS system, the report notes. The governments of Medellin and Antioquia pitch-in with yet more subsidies, while the employer-funded Comfama organization attempts to make-up the rest. But between the three organizations, the subsidies still aren’t enough.

Some sort of “capitalization” scheme (such as a partial sale of stock in Savia Salud to some private health-care company) potentially could ease the fiscal crisis, the report adds. Heftier subsidies from the national government also would help. But Colombia’s national government is already running deeply in the red, making massive increases in subsidies highly unlikely.

On the other hand, pioneering efficiency standards as employed by Sura -- Colombia’s leading private-sector EPS -- probably could help cut some of the deficit, according to the report.

Savia Salud has more than 2.2 million people in its network in Antioquia, of which 1.56 million are the poorest “subsidized” patients. Too many of these poorer people have chronic illnesses and demand the costliest medicines and costliest procedures, which they can’t afford in the private health networks. In addition, many poorer patients in rural parts of Antioquia (and elsewhere) that lack nearby, high-tech hospitals travel to Medellin where they contribute to chaotic, overcrowded conditions in local public hospitals, the report notes.

During the year 2017, Savia Salud ran-up a COP$175 billion (US$52 million) debt and had an accumulated negative net worth of COP$453 billion (US$134 million), the report noted.

What’s more, the mainly public Savia Salud “mixed” EPS “runs the high risk of politicization and burocratization given that its partners [including public hospitals] have certain [payment] expectations and [treatment] mandates,” the report notes.

“This is what in part is the experience today of Savia Salud, where there’s no co-responsibility” between the EPS network and health-service providers to rationalize care. “The model of the EPS has been distorted by an excess of political influence,” the report adds.

Education, Labor, Broadband Upgrading

On other key fronts, Colombia needs to invest much more in technical and technological education --  if the country ever hopes to compete better with more-advanced nations, the report notes.

Partly because of a history of relatively lower-quality public education -- which often doesn't prepare people sufficiently for today's higher-tech jobs -- about 45% of Colombia’s work force is in the “informal” sector rather than working for modernized companies and corporations, the report notes.

According to a recent report from Colombia’s Private Council on Competitiveness, Colombia needs to make several labor reforms, including:

1. Reduce the costs of certain mandatory, non-wage benefits.
2. Modernize labor codes to enable greater work-standards flexibilities.
3. Reduce the costs of hiring new workers.
4. Broaden the tax base to include more salaried employees, hence making possible more-competitive corporate tax rates.
5. Update the social-security systems for health and pensions.
6. Create incentives for informal businesses to convert to formal, tax-paying businesses.

As for public education programs, Antioquia is lagging behind many of its Colombian departmental neighbors, especially in the crucial “STEM” rankings for competence in science, technology, engineering and mathematics, the report notes.

Meanwhile, just over one-third (34.5%) of Antioquia’s students have access to higher education, according to the report. That puts Antioquia below Risaralda (41% access), Norte de Santander (40%), Boyaca (40%), Quindio (39%) and Atlantico (39%), according to the report.

At the other end of the scale, nations that are members of the Organization for Economic Cooperation and Development (OECD) on average ensure that 73% of students have access to higher education, while Latin America in general has 48% access coverage, according to the report.

For Antioquia to hit the Latin American average, it ought to be offering higher-education coverage to 263,000 students between 17 and 21. But Antioquia was offering such coverage to just over 199,000 students as of 2017, the report shows.

Future development of proposed “digital universities”  would enable more students in rural areas to access university education -- and that would help cut Antioquia’s higher-ed coverage gap, the report notes.

Expanding broadband internet access also would boost educational prospects for students throughout the Antioquia department, the report notes.

Current Antioquia broadband penetration is 16.6% of the department’s population, second ranked in all Colombia -- and way ahead of the 10% penetration average in all of Latin America, according to the report.

However, more-advanced nations have 35% broadband penetration, while Uruguay, Argentina, Chile and Puerto Rico have broadband penetration rates between 17% and 27%, according to the report.
For Antioquia to reach Uruguay’s broadband penetration, another 780,000 citizens would need connections, while 1.27 million would need to be added to reach advanced-nation levels, according to the report.

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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.

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