In a growing snowball of bad news for Colombia’s mining industry, global mining site Mining.com reported that $7.3 billion of mining investments have been stalled in the country due to “delays in environmental approvals” and decreased international demand.
Mining is Colombia’s second largest exportation sector making up 44.94% of Colombia’s exports in 2010. Furthermore, coal is the second largest traditional export from Colombia, making up 23.73% of the total in 2010.
Claudia Jimenez, a Large Scale Mining Association representative, shed some more light on the industry and what is actually causing the slowdown, in an interview with local newspaper VanGuardia. Jimenez attributed the investment halt to the overall decline of the industry recently.
“It was not a good year for the industry…but we hope that there can be a little growth, but the tendency is leaning toward a standstill unless there will be change,” said the mining representative.
Jimenez claimed that the Colombian government has seen many “delays in environmental approvals” on issues that the mining companies are willing to comply with. The process, she said, has been creating a bottleneck that’s slowed down the potential for growth across companies.
Mining.com also hypothesized that as other countries begin to recover from their own financial crises, the investments will continue to increase again.
Colombia is very dependent on mining and on coal specifically, so $7.3 billion dollars of stalled investments plus a scandal-du-jour with the United States-based Drummond Company could damage the country’s economy.
Drummond, the second largest coal producer in Colombia, has had a rough couple of months with striking workers at the end of the summer, about $100 million in fines for failure to pay taxes, and a coal dumping scandal that has forced the government to suspend the mining giant’s shipping license, a move expected to cost the company as much as a quarter of its annual revenue.
MORE: Strikes take serious hit on coal industry, national GDP
MORE: Drummond fined $100M for failure to pay taxes claimed by Colombia
MORE: Santos orders minister to assure Drummond respects environmental regulations
MORE: Drummond dispute suspension of shipping license
Drummond is one of a number of industry-leading companies to see major expansion projects stalled or denied in recent years due to environmental concerns. The company is currently appealing the government’s decision to reject its proposal for “El Descanso Sur,” an open-pit coal mine that would be the largest in the world.
- More than $7 billion in mining investments stalled in Colombia (Mining.com)
- Frenadas inversiones de la gran minería por US$7.300 millones (VanGuardia)