AngloGold Ashanti, the world’s No. 3 gold producer, could invest $2.5 billion to $3 billion to build a gold mine in Colombia if feasibility studies show the project is viable, a top executive said.
“It depends on the size of the project but potentially the company could invest as much as $3 billion,” Rafael Herz, head of AngloGold in Colombia, said in an interview on the sidelines of a mining conference in Bogota.
Colombia has granted a partial permit to AngloGold to explore the La Colosa goldmine in Tolima department, but the company is still waiting for a water permit from local authorities.
Herz said AngloGold expects to invest $250 million in exploration at La Colosa in the 2010-2012 period.
If the company obtains the water permit, exploratory work at La Colosa to conclude feasibility studies could finish in late 2012. Mine construction could go ahead between 2014 and 2016 to begin gold production in 2016 or 2017, Herz said.
In February 2008, local authorities ordered the suspension of the La Colosa project on environmental grounds. Later a partial permit was granted.
Local utilities authority Cortolima is holding back water permits, saying that the water needed to carry out exploratory work may endanger rice plantations, said Luis Parra, spokesman for local backers of the project.
The project would provide 4,000 jobs in Cajamarca town during the 20-year life of the operation, if its 12.3 million ounces in unproven resources are confirmed and the project goes forward.
Colombia will double its gold production over the next five years to produce about 3 million troy ounces of gold in 2015, up from the 1.57 million troy ounces produced last year, Asomineros, the country Miners’ Association, says.
AngloGold is one of several international miners who have been attracted to the country’s rich resources as its security situation improved. Gold mining companies are expected to invest $400 million in Colombia this year, according to the country’s mining association. (Diana Delgado / Reuters)