Ratification of reserve zone decree gives Colombia's mining sector the jitters

Colombia's state council ratified decree 044 that authorizes the environment ministry to create natural reserve zones, but the move raises concerns in the mining sector.

Experts fear that the ambiguity regarding the decree's specific application could hinder the certification of concession contract proposals and other procedures required for various mining projects.

Under the decree, the executive must define the technical criteria to establish if there have been environmental protection deficiencies in certain areas with respect to mining, as well as the conditions and standards of environmental protection. It also must define areas with ecosystem value that merit conservation and water sources that require additional conservation efforts, among other issues.

Uncertainty arises because the technical criteria have not yet been established, although the government has maintained that the creation of these zones does not imply the suspension of mining titles that cover those places, Laura Lizarazo, global risk analyst at consultancy Control Risks, told BNamericas.

"The government faces the great challenge of balancing the implementation of these decisions with the imperatives of legal certainty for the sector, and to do so the environmental authorities must weigh up various criteria," she said.

Meanwhile, mining association ACM highlighted that the decree has not been openly discussed, nor have local communities and authorities been involved in its creation, putting at risk the stability and autonomy of the mining and energy sector by imposing natural reserve zones arbitrarily, potentially threatening the sustainable development of the country.

"The implementation of decree 044 will cause the paralysis of investments and activities in the affected territories, causing serious consequences for local communities that depend on mining and energy activity as a source of employment and development," ACM wrote on social media.

CONCERNS

Signed on January 30, decree 044 establishes that designations will remain in place for up to five years, extendable once, as long as there is no certainty about the effects of mining in an area.

During this period, no exploration or extraction permits will be granted, and authorities may order the permanent closure of operations in any zone.

According to Lizarazo, reserve zones have existed since 2013 and the administration of President Gustavo Petro deploys the concept in compliance with a 2022 ruling by the state council, which ordered the executive to remedy environmental protection deficiencies the State had incurred with respect to mining in the last 30 years. 

The council, the constitutional court and other authorities found deficiencies that led to significant environmental conflicts across the country.

That ruling forms the basis for the Petro government's suspension of granting new mining titles and the way to remedy the deficiencies is the creation of temporary reserve zones, Lizarazo added.

According to energy planning unit UPME, 6,939 mining titles were in place in June, covering 3.12Mha, less than 3% of the national territory.

Of the total, 53% corresponded to construction materials, 23% to gold and precious metals, 14% to coal, 4% to emeralds, 1% to copper and 5% to other minerals.

ACM said that environmental investments by the private sector exceeded 727 billion pesos (US$175 million) in 2023, more than double the environment ministry's budget.