Wednesday, February 22, 2012

Colombia – Mining companies investing heavily in gold projects

Colombia’s gold industry is attracting interest from mining companies. It is expected that six companies, including Gran Colombia Gold, Mineros S.A., SUX, Eco Oro, Anglo Gold America and Anglo Gold Ashanti will invest a total of US$2.1 billion through 2015.

These are major investments to increase production and explore areas thought to contain valuable deposits of the metal. According to Claudia Jimenez, executive director of the large-scale mining association, investment could exceed expectations as the size of the country’s gold reserves becomes better known.

Most of the investment will be focused on exploration and while production is growing at around 8% annually, no major surprises are expected in this field. It is estimated that gold production will rise from 53.6 million tons to 55.9 million tons.

One of the mining companies expected to invest heavily is AngloGold Ashanti Colombia. The company’s president Rafael Herz said the company has a budget of US$750 million of which US$350 million was invested by 2003 and 2011. However, investment is expected to accelerate over the next three years, during which the company plans to invest the remaining US$400 million.

Another example is Mineros S.A. which as well as investing to boost production, will spend around US$25 million on exploration in order to rapidly develop new projects which will allow it to maintain production levels.

Beatriz Uribe, president of Mineros S.A. says that, while opportunities exist for gold companies in Colombia, guarantees over security and regulations are required for the industry to continue developing.

Gran Colombia Gold plans to invest a similar amount to last year when it spent more than US$19.5 million on improving production to achieve a total output of close to 100,000 ounces of gold. This year its efforts are focused on its Marmoto mine.