0516 GMT September 23, 2019
Other multinational mining companies looking to kick off similar projects in Colombia have struggled amid legal, financial and licensing troubles and environmental and community objections, Reuters.com reported.
The following is a breakdown of challenges faced by gold miners in the Andean nation.
AngloGold Ashanti Ltd was forced to abandon its $2 billion La Colosa mine after a 2017 community vote banned mineral extraction.
The vote came amid a wave of environmentally focused anti-mining referendums that spooked investors. The constitutional court later ruled referendums cannot halt energy projects because the country’s subsoil is national property.
Earlier this year the company was forced by a local mayor in Antioquia province to halt a soil study at its Quebradona copper exploration, before a provincial environmental authority ruled work could continue.
The company’s Gramalote gold project, which is in planning stages, could produce between 350,000 and 450,000 ounces per year, AngloGold says.
Canada’s Eco Oro Minerals Corp sued the Colombian government after its Angostura project in Santander province was cut in half by a 2014 constitutional court ruling that expanded wetland protections.
The company is suing for $764 million in damages in ongoing arbitration. It has said it has already invested some $250 million in Colombia, including in Angostura.
Vancouver-based Red Eagle Mining Corp had predicted its San Ramon mine, in mineral-rich Antioquia province, would produce up to 50,000 ounces of gold in 2018, but the company was forced to shutter the project amid a restructuring negotiation.
In November $38 million of equity financing meant to enable an operations restart fell through and the company was served with a default notice.
Minesa, owned by the government of Abu Dhabi through its investment arm Mubadala Investment Corp, is waiting for environmental licenses for the $1 billion Soto Norte project in Santander province.
The miner plans to eventually produce some 410,000 ounces of gold per year, but has struggled to develop positive relationships with the community around the proposed project.
The company’s chief executive caused a minor scandal this year after Colombian media released video of him saying local opposition to the mine is unimportant if Bogota authorities grant the license.