The gold mining industry in Colombia is undergoing some big changes. The most dramatic is the government’s campaign to eliminate illegal operations and promote legal and environmentally safe mining.
Gold mining in Colombia started in pre-Colombian times. During the 19th century Colombia was the largest world producer of gold. Political unrest and poor security led to a major lack of gold exploration in Colombia. In fact, less than 8% of the country has been explored. Major security achievements instituted by the Colombian Government since 2002 have opened areas that were previously off-limits. As a result, large companies such as Anglo Gold Ashanti, Kinross, Barrick, B2Gold and Mitsui Mining, and a several successful juniors have entered the Colombian market to participate in this growth sector. Colombia today offers one of the last great gold mining opportunities, combining large untapped deposits, political stability, and a pro-business environment.
Illegal or “irregular” gold mining in Colombia has been going on literally for centuries, with the vast majority being by small “artisanal” miners. These artisanal miners have little impact on the environment and are not really the problem. It is the large, illegal mining operations that are of concern to the government because these can be used to fund illegal armed groups like the FARC, they do not pay the canons or yearly lease fees nor do they pay the government royalties from the gold they produce. Worse, they tend to use toxic chemicals in the refining process and do no remediation of the land they disturb leaving it a toxic wasteland.
The central government has never had firm control of the remote areas of the country where mining operations tend to be located, and until fairly recently, had not gone after illegal mining to the point where there was much of a downside for some people to try to mine illegally. Now with the government placing a high priority on stamping out illegal mining, there is increased pressure in the mining community to become fully legal and operate in an environmentally safe way.
To mine gold legally in Colombia, one needs a government concession which is the legal mineral rights to a particular piece of land. This process involves applying for and being rewarded a concession. Then the new concession holder needs to receive an official signed contract from the government signed by the governor of the department or province the concession is located in. Once the concession and signed contract are received, the next step is preparing a detailed work plan called a Plan de Trabajo y Obras (PTO) along with an environmental report called a “Plan de Manejo Ambiental”. The PTO and environmental reports need to be submitted to the government mining office and the environmental office for approval. The information needed for these reports is extensive and includes required general exploration work headed by a geologist or mining engineer.
The core of the exploration work involves taking samples from various parts of the concession to be analyzed by qualified labs to determine gold content, etc. In addition, a mining plan is also required along with detailed information on the makeup of the concession and the general area including the local population. Once the PTO and environmental reports are approved by the related government offices, a final permit can be issued to allow for full scale mining operations. The environmental office will monitor the mining operation to ensure that proper remediation is being done and that no toxic chemicals are being dumped illegally.
The methods of mining can range from fairly simple equipment that recovers a low percentage (25% to 40%) of the gold content (typically placer which is either river dredging or mining alluvial deposits left by ancient rivers) to more efficient, high tech equipment that can recover up to 95% of the gold present in the material being processed (includes placer and hard rock mining). The advantage of the high tech equipment is that it produces much more gold using the same fuel and resources and requires less land to be disturbed as opposed to a low tech operation producing the same amount of gold.
Legal mining produces revenue for the government and stimulates the local economies through employment, and the purchase of supplies and equipment, etc. In addition, legal, socially-responsible mining operations give back to the local communities through various “socialization” programs such as buying books and computers for the schools, helping to provide low cost housing, etc. To sum it all up, Colombia is poised to again become the world’s top producer of gold and it will be legal mining that leads the way. The economic benefit to the country is enormous and will help Colombia move towards the eventual goal of becoming a first world country.
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