AngloGold Ashanti suspends Colombia's US$2bn La Colosa project

South African miner AngloGold Ashanti said it suspended its US$2bn La Colosa gold project in Colombia after a local community voted to ban mining in the area because of environmental concerns.

The community of Cajamarca in Tolima department voted in a March 26 referendum, made possible by a constitutional court ruling that overturned the Colombian central government's authority over mining projects.

The project halt also means ceasing employment and work on health, education, infrastructure, agricultural and livestock projects in the area, the Johannesburg-based company said.

"We respect and accept the position expressed by the community. The La Colosa mining project has been working for years without any concrete progress," the company said in a statement. "We will continue working to seek the constructive and sincere dialogue that the mining sector needs in Colombia."

AngloGold will pay off about 300 workers and retain just 10 administrative employees at the project, according to Bogotá-based newspaper Portafolio. The company's press office did not immediately reply to an e-mail seeking comment.

AngloGold, which has been working on the project for 14 years, had lined up 28Moz in gold resources. The mine would have created 2,500 construction jobs, 750 jobs at the mine and paid out 15tn pesos (US$5bn) in royalties and taxes over a 30-year mine life, according to the company.

The company has invested a total of US$900mn on its three projects in Colombia since 2006, including 6bn pesos in social programs over the past two years, according to Portafolio.

The project suspension comes after the government last year banned mining operations in natural wetlands, spurring litigation by Canada's Eco Oro Minerals, whose Angostura gold-silver project was affected by the ruling.

AngloGold claims the operation would have used 0.2-0.3m3/sec of water, less than 1% of the average flow rate of the Coello river, according to Bogotá-based daily El Tiempo. The project also reforested 8.4ha of land in the area with 15,200 trees, it said.

Colombia's gold production rose 4.5% to 1.99Moz last year after Vancouver-based Red Eagle Mining began production at its US$55mn San Ramón mine , according to the national mining agency (ANM).