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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.


Five Israeli high-tech companies in the agriculture sector, the Antioquia departmental government and Medellin’s Agency for Cooperation and Investment (ACI) just launched a new initiative to boost investment and productivity in Antioquia’s booming agricultural-exports sector.

According to a joint announcement from ACI, the Antioquia government and Israeli Ambassador to Colombia Christian Cantor, the initiative aims to further Israel’s world-leading ag-industry technologies and investments in Antioquia, while simultaneously boosting Colombia’s growing and profitable agricultural exports.

The five Israeli companies participating in the launch here in Medellin include:

1. TapKit, “specializing in large-scale hydroponic systems for fresh culinary herbs, micro-greens and vegetables based on its own advanced growing methods;”
2. Agritask, “which offers a platform designed to unite precision agronomy and business intelligence;"
3. ClariFruit, “provider of optimization software solutions for the fresh fruit and vegetable industry;"
4. LR Group, “which operates in the initiation, development, financing, construction and management of medium and large-scale projects in high-growth economies;" and
5. Bean & Co, “a global cocoa company that grows sustainable large-scale cocoa plantations around the world,” according to the joint announcement.

The initiative represents a “fundamental step to further strengthen the competitiveness of the [Antioquia] region in the agro-industrial sector in the lines of precision agriculture, irrigation systems and greenhouses,” according to the parties.

Colombia’s recently approved free-trade agreement with Israel is one of the key reasons for the new initiative -- although numerous Israeli companies have aggressively pioneered investments here in Antioquia and Colombia especially in the last five years.

Commenting on the new initiative, Antioquia Governor Aníbal Gaviria Correa stated: “In these coming years, major transformations of our department’s competitive platform will be consolidated thanks to the construction of fourth-generation [high-speed, high-capacity] highways, the completion of Hidroituango [Colombia’s biggest hydroelectric dam] and the new ports of Urabá [on the Atlantic coast], among others. These works, added to the security and institutional stability here are key elements that allow us to invite investment from Israel and the world to our department and our country.”

Antioquia’s Secretary of Agriculture Rodolfo Correa added that “it is inspiring what Israel does in the modernization of the agricultural sector in areas of organizational models, technology transfer, efficiency and other advances and developments.”

Christian Cantor, Israeli Ambassador to Colombia, added that “agriculture is and will continue to be a main axis of relations between the government of Israel and Colombia. The companies that are presented at this event are among the best companies that Israel has to offer to Antioquia”.

According to the parties, “Antioquia has key products in the agro industry favoring exports and investment including Hass avocados, cocoa, citrus fruits and beef, among other products. In the case of Hass avocados, exports have grown by 40% in just the last four years.”

Managro Hails New Initiative

Asked to comment on the latest initiative, Israeli expat Chagai Stern -- executive director of Medellin-based agricultural investment firm Managro -- added that “we realize and promote the important partnership between Colombia and Israel. We have been doing so since we were established here in Medellin five years ago.

“Colombia has all the natural resources and scale that any country could wish for and Israel has the technology and know-how especially in the agriculture sector. That’s why we believe that the free-trade agreement between Israel and Colombia will only enhance the partnership and collaboration.”

Earlier this year, Managro bought Colombia’s giant “Pacific Fruits” packing and export company near Cali -- boosting capacity for export of ag products including Haas avocados and mangoes.

Pacific Fruits boasts that last year alone, it shipped 250 ocean export containers of Colombian farm products to Europe, Saudi Arabia, Japan, United Arab Emirates and Hong Kong, tapping proprietary production in Antioquia and Valle del Cauca as well as contracts with ag producers in 14 Colombian departments.

As a result, Managro now administers more than 1,000 proprietary hectares of agricultural production including avocados, milk, mangos, lemons, oranges, guanabana, pineapples and corn.


Colombia’s national economic statistics agency (Departamento Administrativo Nacional Estadistica, DANE) announced November 17 that third quarter (3Q) gross domestic product (“PIB” in Spanish initials) rebounded by 8.7% over second quarter (2Q) 2020.

While the sharp increase in GDP in the latest quarter is an encouraging sign, 3Q 2020 GDP is nevertheless down by 9% compared to 3Q 2019 -- all because of the drastic shutdowns and cutbacks this year resulting from the Covid-19 pandemic.

Comparing 3Q 2020 with 3Q 2019, wholesale and retail sectors including motor vehicles, transport, tourism and food services collectively fell by 20% year-on-year, while construction dropped 26%, DANE noted. Mining and quarrying also fell by 19% year-on-year, the agency noted.

Expenditure on final consumption fell 7% year-on-year, while gross capital formation declined 18.3%, exports fell 24.1% and imports declined 21.1%, according to DANE.

On the upside, “compared to the immediately previous quarter, the [3Q 2020] Gross Domestic Product in its series adjusted for seasonal and calendar effects grew 8.7%,” according to DANE.

The big improvements in 3Q 2020 versus 2Q 2020 include the following changes, according to DANE:

• Manufacturing industries grew 23.4%.
• Wholesale and retail; repair of motor vehicles and motorcycles; transportation and storage; accommodation and food services grew by a collective 22.3%.
• Artistic, entertainment and recreational activities and other service activities, together with activities of individual households as employers collectively grew 12.3%.

In addition, 3Q 2020 gains over 2Q 2020 include these bright spots:

• Final consumption expenditure grew by 7.3%.
• Gross capital formation grew by 21.6%.
• Exports grew by 1.9%.
• Imports grew by 13.5%, according to DANE.


Medellin-based multinational banking giant Bancolombia on November 12 reported a 68% decline year-on-year in third quarter (3Q) 2020 profits, to COP$73 billion (US$20 million).

For nine-months 2020, net income so far this year is down 79.5%, to COP$542 billion (US$149 million), according to the company.

Despite the pandemic-caused decline in earnings, “Bancolombia continues to strengthen its digital strategy with a robust growth in its mobile platforms,” now totaling 8.2 million digital accounts including 4.2 million users of ‘Bancolombia a la Mano’ and 4 million users of the electronic ‘Nequi’ platform, according to the company

As a result, “85% of total transactions are carried out through digital channels” rather than higher-cost, in-person banking, according to Bancolombia.

Gross loans in 3Q 2020 grew 8% year-on-year, to COP$199 trillion (US$54 billion), while loan provision charges soared 133% year-on-year, to COP$1.7 trillion (US$467 million). The coverage ratio for 90-day past due loans was 232%, according to Bancolombia

“This level of provisions was largely explained by the deterioration of the consumer portfolio, Covid-19 and the update of macroeconomic variables in our expected losses models,” according to Bancolombia.

As of September 30, 2020, Bancolombia’s assets totaled COP$265 trillion (US$72 billion), up 12% year-on-year, while liabilities grew 13%, to COP$239 trillion (US$65 billion).

“The increase in total assets during the year is largely explained by the growth in the loan book, interbank borrowings and financial assets investment,” according to Bancolombia.

Total reserves for loan losses increased by 9.7% during 3Q 2020, totaling COP$15 trillion (US$4.1 billion), equivalent to 7.6% of gross loans.


Medellin-based highway construction giant Construcciones El Condor on November 12 reported a 415% year-on-year plunge in third quarter (3Q) 2020 net income, to COP$16 billion (US$4.4 million).

Gross income for 3Q 2020 was down 11%, to COP$565 billion (US$155 million), “explained by the paralysis in the execution of the works on the occasion of the Covid-19 pandemic,” according to the company.

The crisis “implied the non-invoicing during this time and the decrease in the invoicing in the months of May, June and July,” but “as of July [we] had high levels of execution in projects,” according to the company.

Operating costs for the latest quarter hit COP$517 billion (US142$ million), “representing 91.55% of income from ordinary activities, while administrative expenses reached 3.2% of said income,” according to the company.

“Operating costs include idle costs, machinery and equipment stand-by costs and personnel costs assumed by the company 100% during the suspension . . . Once these costs have been recognized in the contractual agreements, the respective recognitions will be made to the executors to bill them for each concession,” the company added.

Earnings before interest, taxes, depreciation and amortization (EBITDA) hit COP$68 billion (US$18.6 million), with an EBITDA margin of 12%, down from 15.75% in 3Q 2019, according to the company.

“Said decrease in EBITDA margin is due again to idle costs due to [Covid-19 shutdown] paralysis. By the end of the year, we expect the EPCs [engineering, procurement and construction contractors] to be able to bill the concessionaires for these costs, which will allow the recovery of the EBITDA margin,” according to the company

As of September 2020, total assets totaled COP$2.29 trillion (US$628 million), while liabilities totaled COP$1.21 trillion (US$332 million), according to El Condor.

As of September 2020, the construction backlog -- the balance of works contracted and to be executed --totaled COP$552 billion (US$151 million), including COP$227 billion (US$62 million) of invoicing executed during the latest quarter, the company added.


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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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