South Africa-based AngloGold Ashanti Ltd., undeterred by another gold mining firm’s problems in securing environmental permits in Colombia, plans to spend $300 million over the next three years on further exploration in this South American country.
Rafael Herz, the chief executive of AngloGold’s local unit, said he’s convinced his company’s project will receive the necessary environmental licenses to eventually start extracting gold in Colombia despite the large roadblocks Canada’s Greystar Resources Ltd. (GYSLF, GLS.T) ran into a couple weeks ago.
“Perseverance is needed,” Herz told reporters Tuesday night. “This is a responsible project that’s good for Colombia. It allows the environment and mining to live together in harmony.”
AngloGold is the world’s third largest gold producer. It has spent $250 million in Colombia since arriving in 2003 and its main project, called La Colosa, is in the central state of Tolima. Early estimates indicate it could contain 12.8 million ounces of gold.
Colombia has become a hotbed for mining exploration in recent years due to an improvement in the security situation. The government has retaken control of many parts of the countryside once controlled by Marxist guerrillas, and many of these regions are thought to contain rich deposits of gold and other minerals.
But while the security situation is less worrisome, environmental concerns are creating a major headache for some firms.
Canada’s Greystar has been in Colombia for more than a decade, and spent more than $100 million to prepare to mine for gold in a high-elevation area of northeastern Colombia. But the government signaled earlier this month it was going to reject Greystar’s project. That led the company to pull its application and has left the firm’s future in the country uncertain.
One of the government’s main problems with the Greystar project was that the mining was to take place in regions called paramos. These ecosystems are made up of grasslands and peat bogs that act like sponges, capturing water that is then released into creeks and rivers that feed crops and reservoirs.
AngloGold has also hit environment-related roadblocks during its exploration phase. Local officials in Tolima halted exploration in 2008, although the company received a temporary permits to continue working. To help offset the environmental concerns, AngloGold has had to haul in from other parts of the country the large amounts of water needed for the exploration process.
(Dan Molinski / Dow Jones Newswires)
