Pessimism growing among Colombian mining entrepreneurs amid lack of govt support

Colombia's mining industry is facing growing pessimism about the future, according to the findings of the 10th Brújula Minera survey conducted by consultancy Jaime Arteaga y Asociados and Colombia's national consulting center (CNC).

The survey indicates that industry businesspeople perceive they suffer from a lack of government support, while a shrinking proportion of the public living in mining municipalities believe that mining is beneficial.

The survey was carried out among 278 managers in the mining sector and 261 respondents working for local authorities, mining authorities, and environmental and regulatory bodies.

Of the businesspeople consulted, 49% said they will reduce their operations in Colombia within the next five years if the current conditions are maintained, while only 14% said they will expand them and 37% foresee them remaining the same.

The survey shows that 34% of the respondents think that the lack of support from the Colombian government is the main reason why mining entrepreneurs believe that their operations in the country will decline.

A total of 21% said that the lack of legal stability is the biggest problem for mining, while 19% cited difficulties in obtaining environmental permits.

Nevertheless, 68% of the managers stated that their companies' social investments increased in the last year.

“The results show that, although public opinion continues to be confident in mining opportunities, the pessimism of businesspeople and the limited progress in government policies have been transmitted particularly to municipalities producing metallurgical coal in Cundinamarca and Boyacá, and those producing metals and precious stones in Antioquia and Chocó,” said consultancy director Jaime Arteaga during the presentation of the survey results.

The questionnaire also revealed that a falling proportion of those consulted believe that progress has been made in the energy transition in the last year, reaching 48% in this year's edition, down from 54% in 2022 and 66% in 2021.

Of the executives consulted, 34% consider that there has been progress in the fight against illegal mining and 38% believe that there have been advances in formalization of small-scale mining operations.

Colombia's mining sector has a series of important tasks to resolve this year, including the creation of state mining company Ecominerales, which is expected to be completed in the second half of the year; reforms to the mining code, which include changes to the mechanism for assigning areas for mining, among various other issues; creation of policies for the protection, formalization and support of small-scale mining; and the suspension of granting of contracts for open pit mining operations.

Businesspeople in the industry are also concerned about a decree signed in January enabling the environment ministry to identify, delimit and declare reserves of natural resources for up to five years, extendable for an additional five-year period, until "there is certainty about the compatibility or incompatibility of mining activities in the reserved area," according to the document. 

During the period in which the declaration of a reserve is valid, the authorities will not be able to grant environmental permits for the exploration or extraction of minerals.

The president of mining association ACM, Juan Camilo Nariño, told BNamericas in January that "the government's announcements about the new regulations generate uncertainty and keep the private investment sector awaiting clarity about the future before making decisions."