Colombian comptroller general raises concerns about creation of state mining company

The planned creation of Colombian state mining company EcoMinerales could lead to the same problems similar previous attempts have caused.

With the bill for the creation evaluated by the first committee of the lower house, the comptroller general warned in a statement that EcoMinerales could "repeat the financial problems, corruption and lack of independence and suitability presented in the defunct Ecominas, Mineralco, Ecocarbón, Carbocol and Minercol" companies.

All these companies had similar functions as those envisioned for EcoMinerales, but which were eventually transferred to geological service Ingeominas.

It added that the participation of EcoMinerales or one of its partners in the selection processes of the strategic mining areas, “would reduce objectivity and transparency” because the government intends to prioritize the granting of these areas to the state company through the new mining law, which risks creating a monopoly for the State.

The comptroller also highlighted that an article in the bill seeks to limit its fiscal monitoring ability by excluding preventive control, even though the constitution cannot be modified by one law.

The entity added that the company would function as an industrial and commercial entity of the State, which owns the subsoil, so it is unclear if it would be obliged to pay royalties.

According to the bill, EcoMinerales would receive resources from national mining agency ANM and hydrocarbons agency ANH during its first five years, in addition to funds from the finance ministry, internal and external credit, and other sources.

The comptroller recommended conducting a study on how much the creation and operation of company would cost, how much ANM and ANH would stop receiving and which budget items would be affected.

“It is not possible to improvise in activities that correspond to a sector as important for the State's public assets as the mining sector, which generates resources for social investment,” the statement said.

ANM president Álvaro Pardo told a broadcaster in March that the Gustavo Petro administration aims to begin setting up the company in the second half.

The bill was sent to the legislature in December.

Among other aspects, the proposal establishes that EcoMinerales will aim to carry out, in Colombia or abroad, exploration, construction, extraction and commercial activities related to strategic and other minerals, their derivatives and products, aimed at industrialization, the energy transition, for agricultural development and public infrastructure.