What's in the bill for the creation of Colombia's state mining company?

The planned creation of Colombia's state mining company EcoMinerales has sparked concerns in the mining sector, especially due to the leading role the company would play.

The bill for its creation establishes that EcoMinerales will participate in the sector on equal terms as private companies and will have access to mining titles for the exploration and extraction of strategic minerals, including in the assembly and construction phases, mining closure, beneficiation and transformation.

See the bill in the Documents box in the top-right corner.

Fundamentally, the company would help meet domestic mineral demand arising from reindustrialization programs, energy transition, agricultural development and infrastructure, as well as supplying the minerals necessary for the productive chains to be created as part of economic policy.

Colombia considers 17 minerals strategic, including copper, nickel, zinc and gold. 

EcoMinerales would also focus on mining formalization, a process under which the government plans to grant titles to groups of miners organized in cooperatives and other forms of solidarity associations, supported by training programs, extraction and commercialization of their minerals, investment and low-cost loans for the acquisition of equipment, among others.

At various industry events, Juan Camilo Nariño, the president of mining association ACM, raised concerns about the “statist vision” of EcoMinerales' creation, which adds to other sector reforms. He also warned about the costs of creating a company that invests at risk in the sector.

Recently, the comptroller general raised similar financial concerns and recommended conducting a study on the cost of the company's creation and operation.

EcoMinerales could "repeat the financial problems, corruption and lack of independence and suitability presented in the defunct Ecominas, Mineralco, Ecocarbón, Carbocol and Minercol" companies, the comptroller wrote in a report.

BNamericas provides an overview of the company's main functions and potential assets.

FUNCTIONS

– prospecting, exploration, construction, extraction, mine closure, transformation, selling, beneficiation activities of strategic or other minerals, directly or through third parties in associations, under operation contracts or other legal concepts;

– any businesses linked to commercial or industrial activities related to exploration, construction and assembly, extraction, mine closure, transformation, beneficiation or commercialization of strategic or other minerals for the domestic market;

– selling and trading strategic and other minerals, as well as their derivatives and products;

– processing and sale of minerals in the local market and export of mineral surpluses;

– transportation and distribution of strategic or other minerals, and their derivatives and related minerals;

– conducting technical, geological and economic studies in coordination with the geological service to understand the country's mining potential;

– signing contracts or participating in businesses defined in national or international legal provisions;

– research to obtain technological support across all mining industry segments;

– creating public-private and public-community partnerships.

RESOURCES

EcoMinerales' capital will initially consist of assets that revert to the State after the termination of the mining titles.

It will also consist of the transfer of mining assets that are owned or controlled by public entities in which the State has a stake.

During the first five years of EcoMinerales' creation, the sector regulator, ANM, or hydrocarbons regulator ANH will contribute to the capital and equity a minimum of 3,000 and up to 9,000 minimum living wages, a living wage being equal to US$340, from the resources declared financial liquidity surplus of the immediately preceding year.

The bill adds, among other aspects, the transfer of stakes and capital held by the finance ministry in companies whose purpose or functions are related to the mining sector.