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Metals Mining Crucial for 'Green' Energy, Transport Metals Mining Crucial for 'Green' Energy, Transport Source: Antioquia Gold

Eco-Friendly, People-Friendly Copper/Gold/Silver Mining Projects in Colombia Confound Petro’s Anti-Mining Rhetoric

Laws, Regulations Written by  Wednesday, 09 November 2022 16:02 font size decrease font size increase font size 0
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While new Colombia President Gustavo Petro broadly demonizes energy and mining companies -- and pushed a new law eliminating royalty tax deductions -- ironically a growing number of copper, gold and silver-mining companies here are confounding Petro’s rhetoric with eco-friendly, people-friendly, economy-boosting and more-transparent projects.

At the seventh edition of the annual “CGS Colombia” symposium here in Medellin on November 8-9 – attracting a record 350 delegates -- numerous companies touted remarkable progress in “green” and “people-oriented” metals-mining projects.

In several proposed and existing projects, mining companies successfully -- even amazingly – have convinced harsh and skeptical mining critics actually to become project defenders.

One of the most astounding examples is that of the proposed Zancudo mining project in Antioquia, where the local Mayor, City Council members and most of the local residents had originally opposed that project, citing fears of water-quality degradation and potentially broader social problems.

But as Zancudo Metals executive Nicolas Lopez explained here, a concerted, years-long educational-outreach effort completely reversed this opposition, resulting in the very same political leaders and 95% of the local population now endorsing an eco-friendly project, which will avoid historically “dirty” mining schemes that (for example) had dumped toxic mercury and cyanide.

Similarly, the AngloGold/B2 Gold “Gramalote” gold-mining project in Antioquia also flipped historic, widespread opposition to this project to endorsement by 90% of locals, thanks to rigorous environmental studies, “green” project features and vigorous community outreach, including community-development and economic-development projects, as Gramalote executive Juan David Ramirez explained here.

However, AngloGold and B2 Gold just announced this month that, unfortunately, the project no longer meets their companies’ financial goals. So the US$925 million project is up-for-sale.

Despite these notably “green” and “people-friendly” projects, today’s anti-mining political climate – exacerbated by Petro – makes it hard to imagine new mining licenses being granted here in the next few years, as mining-industry consultant Hernan Rodriguez contended in a panel-discussion here.

For some companies that can afford to wait-out the next four years of Petro, or (optionally) sell their licenses to more-optimistic third parties, or successfully maintain eco-friendly, positive relations with local communities, this picture might not seem so bleak.

Even so, those companies sticking-it-out need to have a robust regulatory compliance program “to avoid losing your license,” as mining consultant Alejandro Ramirez warned here.

On the other hand, as CGS Colombia founder and chairman Paul Harris explained here, “there’s no reason for the mining sector to be overly fearful” for the future -- or at least a future as might be applied to the metals-mining sub-sector.

Today’s widely-acknowledged, growing movement away from coal, oil and natural gas – seen as principal “global warming” threats – should stir much-greater support for “eco-friendly” mining of certain metals crucial to the transition to “green” electric power and “green” transportation, Harris noted.

So while Petro and others are broadly railing against energy and mining companies -- in political forums such as the COP-27 global-warming conference in Egypt this month -- and while social-media twits spew vituperative rhetoric in all directions, the metals-mining sectors actually should see themselves calmly playing a key role in the “green” transition, Harris pointed-out here.

With Petro claiming to push goals such as poverty reduction, climate-change avoidance and trimming of Colombia’s crushing national debt, metals-mining companies actually can be seen aligning with his goals, he explained.

“It’s almost a duty for Petro to support Colombian copper,” he added, citing five new Colombian copper-drilling projects already proposed or underway here.

Buy-in by local populations and local governments for any development project is also a top Petro priority, he noted. “This could be key to unlocking projects,” Harris emphasized.

While some government officials want to see a revised, tougher Colombian mining code – which could snarl and delay beneficial projects for years – this seems unlikely as Petro’s main priorities now are tax reform, health-system reform, pension reform and labor reforms, all of which will take time -- and eventually exhaust Petro’s political capital in Colombia’s multiparty, divided Congress, he added.

As Colombia Risk Analysis analyst Sergio Guzman added here, changing the mining code “is not a priority” as compared to Petro’s other, more-urgent priorities.

Actually, “what’s most important to Petro is symbols,” such as pushing “change,” showing “strength,” being “green” and perhaps most of all, viciously attacking former center-right President Alvaro Uribe, ironically the most popular Colombian president in history.

Meanwhile, Petro’s fragile coalition in the Colombian Congress this month just slashed his unpopular, initial COP$50 trillion (US$10.2 billion) tax-hike legislation to COP$20 trillion (US$4 billion) and likewise is expected to hobble or delay other “reform” proposals, Guzman explained.

What’s more, the upcoming October 2023 elections would seem likely to spur a broad anti-Petro backlash, as Colombians are suffering heavy inflation, recession and currency-devaluation problems.

As a result of a sour national economic outlook, Petro’s disapproval ratings already have soared and his approval ratings likewise have plunged to only 46% -- just three months into his four-year term.

Petro’s similarly bombastic, chaotic earlier term as a Bogota Mayor likewise produced mediocre results, including irrational blame-shifting schemes that flipped 65 cabinet secretaries though 19 positions in just four years.

“He’s not a good administrator,” Guzman explained here. “Will he learn to compromise? It’s not his favorite thing to do. He wants power. If the October 2023 elections are bad for Petro, that will make him even more frustrated.

“He can’t pack the courts [as the Colombian Constitution prevents him from sidestepping Congress] and that will lead to stalemate and brinksmanship. He’s also facing fiscal and current account deficits -- and the tax reform won’t fix that.”

If Petro instead tries to impose populist price controls, new subsidies and bring import tariffs, then that will only worsen deficits and cause new scarcities, provoking consumer/voter anger, he explained.

Meanwhile, Petro’s proposed “total peace” plan with the narco-terrorist ELN, re-FARC and “Clan del Golfo” groups seems dubious as many of these actors “don’t negotiate in good faith,” Guzman added.

Bottom line: mining companies here need to avoid “getting between Petro and his symbols,” and instead should seek to promote and emphasize eco-friendly, people-friendly, economically friendly and transparent projects that (at least notionally) align with Petro’s main goals, he concluded.

Read 190 times Last modified on Saturday, 12 November 2022 09:00

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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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