Showing posts with label Colombia. Show all posts
Showing posts with label Colombia. Show all posts

Sunday, November 18, 2012

Colombian coal production falls 8% in Q3 vs year ago

Colombian coal production fell 8% in the third quarter to 21-million tons versus the same period last year as labor disputes cut output in the world's fourth-largest coal exporter, according to data from the mining regulator.

Strikes at a key coal railway serving some of the country's top producers and at a large mine have had a negative impact on output in Latin America's top exporter of the material.

Drummond, the country's second-biggest exporter, saw production increase a paltry 1.7% in the quarter to around six-million tons versus a year before. Output fell 8.5% versus the second quarter this year.

Glencore-owned mines saw output drop 21% due to a three-month-long strike at La Jagua coal mine. La Jagua's is the highest-quality coal produced in Colombia and the mine's production plunged 92% in the third quarter.

Compared with the second quarter of 2012, total output from the mines fell nearly 19%.

The walkout to demand higher wages and better working conditions started on July 19 and became one of the longest labour strikes in the sector's recent history, ending in late October.

Drummond and Glencore's Prodeco unit are shareholders in the Fenoco railway whose workers went on strike for more than a month in July to August.

In the July-to-September period, coal production at Colombia's largest exporter, Cerrejon, fell about 2% to 8.7-million tons versus the same period in 2011, regulator data showed. It decreased around 7% versus the second quarter.

The Andean nation's thermal coal sector is dominated by major producers such as Glencore, Drummond and Cerrejon, which is jointly owned by BHP Billiton, Anglo American and Xstrata.

Labour strife has forced the government to lower its production goal to 93-million tons for 2012 from a previous target of 97-million tons. Colombia produced 85.8-million tons last year.

Colombia's mining industry has also faced increased attacks by Revolutionary Armed Forces of Colombia (FARC) rebels this year despite Bogota sending thousands of additional troops to protect the sector.

The government and FARC guerrillas have started a peace process aimed at finding a negotiated end to the five-decade-old conflict. At the start of talks, rebels called for foreign oil and mining interests to leave the country.

Edited by: Creamer Media Reporter

Sunday, November 4, 2012

Peruvian gold producer bulks up Colombia-focused junior exposure

Another South American miner takes an interest in Canadian juniors operating in Colombia following recent takeovers by AUX

Author: Kip Keen

As it pursues growth beyond Peru, Consorcio Minera Horizonte, a leading Peruvian gold producer, is bulking up on Canadian juniors with Colombian gold assets. After recently announced financings Consorcio Minera Horizonte (CMH) will own a majority of Antioquia Gold's outstanding shares and is set to buy a controlling stake in Batero Gold.

CMH started investing in Canadian juniors with a Colombia focus back in 2010. It began by striking a strategic alliance with Antioquia Gold, which owns the high-grade gold Cisneros project, as part of an initial private placement for 16.2 million shares @ C$0.20.

Since then, through notably lean times for junior financings, CMH's appetite for Antioquia Gold shares has remained strong. In subsequent private placements - the most recent in late October - CMH's position in Antioquia Gold has grown to 66.2 million common shares or 81.5 million shares outstanding, which represents a 54-percent interest in Antioquia Gold.

Now it has a second junior in its sights. Within a couple days of taking a majority stake in Antioquia Gold, it and Batero Gold inked a strategic alliance along with a C$20 million financing. In two private placements, subject to shareholder approval, CMH is to buy a 35-percent stake in Batero, giving it a controlling interest in a junior that owns the La Cumbre gold project.

"It's good for the company," said one analyst, familiar with Batero. The analyst echoed Batero's rationale for the deal, that the junior is getting a knowledgeable miner as a partner to help it push its La Cumbre gold project forward. La Cumbre is a multimillion ounce gold deposit that Batero has outlined as a low-grade bulk tonnage project with potential for heap-leaching.

The analyst, who preferred not to be named, also noted it was a "tough time for financings right now" and agreed with the notion Batero would have been hard pressed to do a better financing than the one it has put together with CMH. The financing with CMH, @ C$0.65, comes at a premium to Batero's average shareprice in October, though still falls far short of the shareprice heights Batero reached earlier this year before it released a multimillion ounce resource estimate in February.

After the resource came out, which disappointed analysts on grade, Batero's shareprice cratered from over C$2.50 to the C$0.50 range where it has traded ever since.

But clearly CMH sees potential in La Cumbre. Likely it, as Batero, has its eye on the possibilities for higher grade gold within La Cumbre's six million ounces in global resources. In the La Cumbre deposit, one of several comprising the wider resource, Batero has shown strong recoveries in oxide and low-sulfur transitional ore. (@ La Cumbre deposit Batero counts 1.5 million ounces gold @ 0.73 g/t gold at a 0.5 g/t Au cutoff in indicated resources and a further 2.3 million ounces @ 0.56 g/t Au in inferred resources.) Further, as previously noted in these pages, the deposit looks to have a nice shape for mining, were that day to come, with a strip ratio possibly in the 0.75:1 range.

Such points will not, of course, have escaped CMH.

And this point should not escape Colombia watchers. CMH's increasing interest in Canadian juniors follows recent
takeovers of two Canadian juniors with a Colombia focus by Eike Batista's AUX, a Brazilian miner. Thus mergers and acquisitions of juniors in Colombia are for being driven not by Western firms, but South American miners looking to grow gold production.

Source: Mineweb

Monday, October 22, 2012

Colombia cuts 2012 coal output goal on labour strife - official

Colombia has lowered its coal production target for this year by 4% due to a nearly month-long strike at the country's main railway and low prices for metallurgical coal, a senior mining official said.

The coal sector in Colombia, the world's fourth-largest exporter of the material, has hit historic highs in both investment and production in the last few years on better security and fiscal terms.

But labour strife has forced the Andean nation to lower its production goal to 93-million tons in 2012 from a previous target of 97 million tonnes, said Henry Medina, deputy mining minister. Colombia produced 85.8-million tons last year.

"There's going to be a very good increase but not what was planned due specifically to the stoppages that happened in Drummond, Prodeco and Fenoco. That's going to reduce output," Medina told journalists Thursday evening at a conference in Cartagena.

Workers at Colombia's main railway, Fenoco, went on strike earlier this year for 25 days, paralysing exports from Colombia's main coal-producing province of Cesar.

Fenoco transports coal for Drummond International , Goldman Sachs affiliates and Glencore International's Prodeco unit.

"The other impact was the price of coal this year, mainly metallurgical. It's been low and that is affecting coal production in the country," Medina said.

Metallurgical coal prices have plummeted this year as the global steel industry grapples with weak demand and falling prices. Metallurgical coal is used to make steel.

Hundreds of thousands of tons of Colombian metallurgical and pulverised coal have not made it to the market due to l ow prices, high production costs and the firming peso currency as producers scramble to sell cargoes, industry sources say.

While the Fenoco walkout ended after the company scored victories against the workers in court, another strike at Prodeco's La Jagua mine has dragged on for about three months.

After failing to come to an agreement, union officials said they are only waiting for the labor ministry to request the two sides go to an arbitration tribunal and lift the walkout.

The Andean nation's thermal coal sector is dominated by major producers such as Glencore, Drummond and Cerrejon, which is jointly owned by BHP Billiton, Anglo American and Xstrata.

The metallurgical sector, however, is made up of small miners in central provinces that sell to larger companies for export.

This year, Colombia's mining industry has also faced increased attacks by Revolutionary Armed Forces of Colombia (FARC) rebels despite Bogota sending thousands of additional troops to protect the sector.

The government and FARC guerrillas started a peace process this week aimed at finding a negotiated end to the five-decade-old conflict, but in the first sign of discord, rebel leader Ivan Marquez slammed foreign oil and mining interests.

The bearded and bespectacled Marquez specifically called for production halts at Cerrejon and Drummond, the country's two top coal exporters.

Colombian President Juan Manuel Santos' administration has ruled out talking about foreign investment in the negotiations.

Edited by: Creamer Media Reporter

Friday, September 14, 2012

AngloGold Ashanti sees Colombia as the hottest new bullion district

South African AngloGold Ashanti’s (NYSE: AU) CEO, Mark Cutifani, said gold projects in Colombia are one of the company’s key current priorities and that it has used its first-mover advantage in the country to build a strong position in what he called “the world’s most prospective new gold district.”

Speaking at the Denver Gold Forum, Cutifani said he recently appointed Charles Carter as executive VP of business in the South American country "to ensure appropriate strategy, alignment, resourcing and scheduling," as he wants those projects to move forward “as fast as possible.”

After his presentation, the executive —who is also the vice president of the South Africa’s Chamber of Mines— also referred to the employee unrest that continues to harm the local mining industry.

“We will find a solution in the next month or two; we’ll come together and redefine a pathway that seeks to answer the right issues, ” he told Ventures Africa.

“We’ve all got to work harder on the social issues; connecting and communicating better with the workforce is important,” Cutifani was quoted as saying. “The union has to also have a look in the mirror and think about its processes to improve the way it’s connecting.”

Key projects

AngloGold has three main projects in the country: the 100% owned La Colosa, and Gramalote and Quebradona, both of them in partnership (51%:49%) with Canadian B2Gold (TSX: BTO).

"Colombia is investor friendly with strong government institutions, evolving mining legislation and strong interest from majors," Cutifani said, adding that the company has resources of approximately 30Moz at a net cost of $2/oz. in the country.

La Colosa has significant growth potential and the final scope of the project has still to be determined. The ore body is currently being tested at depth to 1,000 m while drilling to the northwest of the concession area shows improving grades (up to 1.9g/t).

Anaima Toche, which surrounds La Colosa and is also controlled by AngloGold, has potential to become a new mining district, according to Cutifani's presentation.

La Colosa is expected to produce at least 700,000oz/y of gold and cost $3.5 billion.

Potentially Colombia's first open pit gold mine, Gramalote's prefeasibility stage is set to wrap up this year. The focus is on front-end engineering and design, land purchase, and environmental, social and community engagement, according to AngloGold.

A deal with local artisanal miners is approaching completion with 152 miners in the project area moving to self-employment or JV roles.

Gramalote should start producing in 2016 and there is potential to grow the current 4.1Moz resource, said Cutifani.

In terms of the Quebradona project, AngloGold is moving to increase its stake in the project from 51% to 70%.

Other operations of AngloGold Ashanti in Latin America include the 92.5%-controlled Cerro Vanguardia mine in Argentina, and the fully owned AngloGold Ashanti Brasil Mineraçao and Serra Grande mine in Brazil.

In the past year, investors, mining companies and explorers alike have been focusing on the South American country, but recent incidents that include a major strike, a new minister of mines and debated renewal of BHP’s Cerro Matoso nickel mine concession, are making foreign firms more cautious.

Colombia’s economy, which is Latin America’s fifth largest, has grown four times as rapidly as Canada’s in recent years, with foreign investment quadrupling between 2002 and 2008.

Monday, July 23, 2012

Colombia to offer gold, coal and copper rights next year

The country aims to draw more spending from investors such as Brazilian billionaire Eike Batista with auctions that may lead to producing mines by 2020, Mines and Energy Minister Mauricio Cardenas says.

Colombia expects to auction gold, coal and copper reserves for the first time next year to draw investment in energy and metals deposits stretching from the nation's Pacific coast to the Amazon jungle.

Rights to explore for coltan, used in mobile phones, uranium and platinum won't be part of next year's auction, Mines and Energy Minister Mauricio Cardenas said yesterday in an interview in central Colombia.

"We're not going to offer all of them at the same time," he said. "We will just take the areas where we have the best geological information."

Colombia aims to draw more spending from investors such as Brazilian billionaire Eike Batista with auctions that may lead to producing mines by 2020, Cardenas said. Investment in mining has lagged spending on oil production that helped push foreign direct investment in Colombia to a record $13.2 billion in 2011.

Next year's auction will include areas where the government has more data on reserves, such as the Andean mountains, Cardenas said. Colombia hasn't set the number of blocks it will offer.

Colombian President Juan Manuel Santos said this week that the government has put aside 20.5 million hectares (50.7 million acres) where new mining rights will be restricted to companies winning at auction.

There is less information available about potential mining reserves than for oil deposits, where auctions helped increase investment, said Gabriel Bayona, an analyst at Interbolsa SA, Colombia's largest brokerage.

‘Lack of Knowledge'

"There's a lack of knowledge about the areas," Bayona said today by phone from Medellin. "The plan perhaps is too ambitious."

Concern about global economic growth also may cool demand for new projects, he said.

Colombia will still award mining rights without auctions outside of the areas set aside by the government.

Colombia is the largest coal supplier in South America, exporting the fuel from mines owned by companies including Drummond Co., Anglo American Plc (AAL), Xstrata Plc (XTA) and BHP Billiton Plc. Companies already developing gold projects in Colombia include AngloGold Ashanti Ltd. (ANG) and Batista's AUX Canada Acquisition Inc., which bought control of Ventana Gold Corp. last year to gain gold deposits in Colombia.

Friday, July 20, 2012

Colombian coal miners strike at Glencore-owned mines

Colombian coal miners went on strike on Thursday over pay and better working conditions at the La Jagua mining complex of Glencore's Prodeco unit, a union official said.

The walkout at La Jagua mines is unlikely to affect spot thermal coal prices in Europe or Asia unless it lasts for weeks, but many industry sources are watching whether workers from Colombia's main coal railway join La Jagua in a walkout.

"Right now everything is stopped," Ricardo Machado of the Sintraminergetica union told Reuters by telephone.

Miners at La Jagua authorized a walkout two weeks ago in Colombia, the world's fourth-largest coal exporter, after 40 days of negotiations with Prodeco failed to produce a deal.

The La Jagua complex has five mining concessions, but the negotiations were only with Carbones de La Jagua.

Machado said workers from the two other Glencore-owned mines, Carbones El Tesoro and Consorcio Minero Unido, had joined the strike, which started at 5:30 a.m. local time on Thursday.

The three areas produced 7 million tonnes of coal last year, according to mining regulator data.

Glencore was not immediately available to comment.

La Jagua's coal is the highest quality produced in Colombia and when not blended, is a niche market material, industry sources said. Glencore's Prodeco operations consist of La Jagua and Calenturitas. It has its own port facilities.

La Jagua has such a high-energy, low-sulphur coal that it often gets sold as pulverized coal for use in steelmaking.

In 2010, laborers at La Jagua went on strike for five weeks before signing a two-year deal, and last year, they struck for eight days at the 5-million-tonne-per-year Calenturitas mine.

Latin America has a history of tense ties among mining companies, unions, indigenous people and environmental groups.

Unions use strikes for leverage in bargaining talks with mining and oil companies, which have been returning to Colombia after a fall in guerrilla violence over the last decade due to a U.S.-backed military offensive.

Source: Reuters

Saturday, June 23, 2012

Colombia reserves 17.6m hectares for mining in east

Colombia has put aside 17.6-million hectares of land for future use by the mining industry, mainly in precious metal- and oil-producing eastern regions, to bring more order to the licensing process, the government said on Thursday.

The world's No 4 coal exporter has seen an investment boom in oil and mining since a US-backed security offensive began a decade ago, but accidents, allegations of corruption, permit delays and inefficiency have plagued the industries.

The government of President Juan Manuel Santos is trying to reform the sector, streamlining licenses, consolidating oversight and strengthening institutions.

Energy Minister Mauricio Cardenas said 17.6-million hectares - an area larger than Greece - were designated "Strategic Mining Areas" in Vichada, Guainia and Vaupes provinces as well as in Guaviare, Amazonas and Choco.

Cardenas said, however, that the majority of the land is in areas rich in biodiversity and protected zones, but officials would pick specific regions and auction them off for mining.

It was unclear how many hectares would be auctioned off.

The areas, mainly in the east along the border with Venezuela, are not major mining zones like Antioquia or other central provinces, and are unlikely to have a large impact on national output in the coming years.

Security in some of the zones is also tricky due to new criminal gangs, born partly out of demobilisation in the 2000s of paramilitary groups that operated in many of the departments.

Colombia has seen a surge in oil and mining investment thanks to a decade-long US-backed crackdown against leftist rebels and illegal armed groups.

A flood of new players has emerged to profit from government policies aimed at luring foreign investors to the country.

Source: Reuters

Thursday, June 14, 2012

Aditya Birla in talks to buy Colombian mines stake for $1bn - report

India's Aditya Birla Group is in talks with American thermal coal miner Drummond Company to buy a "significant stake" in its coal mines in Colombia for $1 billion, the Financial Express said in a report.

The telecom-to-cement conglomerate is looking to pick up rights for about 20% to 40% of the coal produced in these mines, the report quoted a source with direct knowledge of the development.

The Indian conglomerate is looking to strengthen its mining business and utilise coal for its captive power plants to make aluminium in India, the report said.

Aluminium maker Hindalco Industries, part of the Aditya Birla Group, has been seeking environmental clearance for mining coal at Mahan in Madhya Pradesh state to feed its captive power plant and a new smelter project.

Monday, June 4, 2012

Junior roundup: Sunward, Almaden, Santa Barbara, Excellon, Gold Reserve

Sunward Resources (TSX: SWD) has completed an updated mineral resource estimate for its Titiribi gold project in Colombia's Antioquia department, the company said in a statement.

Based on a cut-off of 0.3g/t gold, Titiribi currently hosts 275Mt of measured and indicated resources averaging 0.52g/t containing 4.58Moz of gold. Including copper, the gold-equivalent resource is 6.28Moz.

In the previous NI 43-101-compliant resource statement issued in September 2011, the figures stood at 143Mt grading 0.48g/t gold and 0.15% copper for 2.20Moz gold and 3.50Moz gold-equivalent.

Sunward has had up to 11 drill rigs active at Titiribi, primarily drilling at the Cerro Vetas and Chisperos mineralized zones. Drilling is continuing, the company said.

Vancouver's Almaden Minerals (TSX: AMM) reported further results from the on-going four-drill exploration program on its Tuligtic gold-silver project in Mexico, with holes drilled in the Ixtaca North Zone.

Highlights include 126m at 1.21g/t gold and 63.0g/t silver, including 10.5m grading 3.61g/t gold and 162g/t silver, and 8.75m at 4.09g/t gold and 229g/t silver, the company said in a statement.

Almaden has four drills operating on the Tuligtic project, and said it plans to continue drilling throughout 2012.

Vancouver-based Santa Barbara Resources (TSX-V: SBL) announced trench and other channel sampling results from its flagship Sancos gold project in the Ayacucho region of Peru.

New trench results have been received from sampling at the Sancos Central and Sancos Northwest high-sulfidation epithermal gold targets, the company said in a release. A total of 51 outcrop samples were collected, ranging in width from 2.5m to 11.5m with assay values from 0.01g/t to 4.71g/t gold, the company said in a statement.

Excellon Resources (TSX: EXN), which has the Platosa silver-lead-zinc mine in Mexico's Durango state, announced that CEO Jeremy Wyeth has resigned from the company to pursue other interests.

Spokane-based Gold Reserve (TSX- V: GRZ) notified holders of its 5.50% senior subordinated convertible notes due 2022 that the company is now offering the restructuring arrangement it previously offered holders of 87.8% of the notes to all remaining noteholders.

Gold Reserve has the Las Brisas gold-copper project in Venezuela.

Monday, May 28, 2012

Brazil's Vale to sell Colombia coal mines

The miner has agreed to sell its El Hatillo and Cerro Largo coal mines in the department of Cesar to a unit of Colombian Natural Resources for $407 million.

Brazilian miner Vale said on Monday it agreed to sell its coal assets in Colombia to CPC, a unit of Colombian Natural Resources, for $407 million.

The deal is subject regulatory approval.

Vale, the world's second-biggest miner, said it will sell 100 percent of its thermal coal mines El Hatillo and Cerro Largo in the department of Cesar, and its port terminal Sociedad Portuaria Rio Córdoba on the Atlantic coast.

Vale will also sell its 8.43 percent participation in the Ferrocarriles Del Norte de Colombia railway that holds the concession to operate the railway between the mines and the terminal.

The company said the sale is part of Vale's plan to optimize its asset portfolio.

Monday, May 21, 2012

AngloGold to invest $400m in Colombia 2013-15

AngloGold Ashanti, the world's No. 3 gold producer, plans to invest $400-million in Colombia in the 2013-2015 period at its La Colosa deposit and other gold exploration projects, a company executive said on Friday.

Some $300-million is earmarked for exploration work at La Colosa, Colombia's largest gold deposit, located in the southern Tolima province.

The remaining $100-million would be invested in exploration projects in the regions of Antioquia, Cauca, Bolivar and Caldas, AngloGold's CEO in Colombia, Rafael Herz, said during a mining conference in the port city of Cartagena.

Hertz said that geological work allowed the company to more than double inferred gold resources at La Colosa to 24-million ounces from initial estimates of 12.3-million ounces.

"Mining resources in the area have been confirmed and are higher than (initially) established," he said.

AngloGold last year unveiled a plan to invest $310-million in Colombia between 2011 and 2013.

A local environmental agency refused to grant a water permit for La Colosa last year, arguing that there is not enough water for the project in the area.

Herz said the lack of environmental and water permits have prevented AngloGold from finishing exploration work at La Colosa in 2012, as it had planned.

The delay with the permits means Colosa may not start production until 2019, two years after initially planned.

The company estimates that la Colosa will produce between 600 000 oz and 800 000 oz of gold per year and that it will have a 20-year lifespan, Hertz said.

Colombia has seen a boom in foreign direct investment, mainly in oil and mining, over the last few years thanks to a US-backed military crackdown on illegal armed groups opening up many areas of the country to exploration.

However, mining and energy investors have run into issues over the past few years from licensing delays to environmental concerns and deadly accidents, forcing the government to overhaul the sectors including creating a new agency to oversee the mining industry.

Tuesday, May 15, 2012

Colombian Q1 coal output rises 14.6%

Colombia's coal production jumped 14.6% to 23.31-million tons in the first three months of 2012, compared with the same period last year, the Andean country's mining regulator said on Monday.

Colombia's coal industry is dominated by big producers with their own ports and railways such as Glencore, Drummond and Cerrejon, which is jointly owned by BHP Billiton , Anglo American and Xstrata.

The top three producers export almost all their output. The main markets for Colombian coal are the US and Europe, although exporters have started to make inroads in Asia despite the high freight costs.

The largest production increases were in the Cesar province where Glencore's Prodeco unit, Drummond International, Vale and Goldman Sachs' local affiliate operate. Output in the region increased almost 21% to 12.84-million tonnes.

Production in Guajira province - where Cerrejon, the country's largest exporter, has four of five licenses to mine - rose 10.2% in the first quarter to 9-million tonnes versus the same period last year, it said.

Production at Drummond's La Loma and El Descanso mines increased almost 28% to 7.06-million tonnes.

The regulator did not give a reason for output changes, but all major coal miners are currently expanding their mines and infrastructure in Latin America's top coal exporter.

The world's No 4 coal exporter is experiencing a boom in investment in the oil and mining sectors following a US-sponsored crackdown on illegal armed groups that has made it safer to explore and mine.

Colombia's coal production is expected to increase to 97-million tons in 2012 from 85.8-million tons last year, the mining minister has said.

Wednesday, May 2, 2012

Colombia to spend nearly $1.3 billion in coal-related ports expansions

Colombia’s leading coal producers are increasing investments dramatically to improve and expand their ports, in what is considered a key move for rising coal production in the country to 120 million tons within by 2014, reports local newspaper La Republica.

This year will be critical for projects lead by Drummond, Cerrejon and Prodeco, as the three companies have put in march projects with investments valued in about $1.3 billion.

The massive investments will guarantee the industry’s long-term development, says Alfonso Saade, executive director of Fenalcarbon, the national federation of coal producers in Colombia. He added that coal mines in the mineral-rich regions of Cesar and La Guajira, in the north of the country, alone, will be producing 200 million tons a year by 2030.

La Republica quoted Saade as saying that planned investment to expand port infrastructure increases the likelihood for the government to meet production targets.

Augusto Jimenez, chairman of Drummond Colombia, said that work has begun on the company’s main port projects, which will allow its company to load coal directly. The coal producer will invest $450 million in its ports during this stage.

Prodeco, a subsidiary of the Swiss trading company Glencore, has begun construction of Puerto Nuevo at Cienaga, Magdalena, by the Caribbean Sea.

The project will require a $600 million investment and will include an 8.5 kilometre-long and 20.5 metre-deep access canal. Vessels with up to 8,000 tons of coal will be leaving that port.

Cerrejon, a joint venture between BHP Billiton, Anglo American and Xstrata, as well as Colombia’s largest coal producer, is working intensively to expand the port in order to increase exports.

The company, which currently produces 30 million tons of coal a year, is expanding Puerto Bolivar, considered the largest complex of its type in Latin America.

Cerrejon President, Leon Teicher, said in a statement that the company plans to spend 50% to 60% of a $1.3 billion expansion budget on construction and the rest on equipment to boost output to 40 million tonnes of coal per year.

The project has an estimated cost of $238 million. The company plans to increase production to 40 million tons a year by 2015, requiring it to expand its transport capacity.

Colombia hopes to double coal output in 2012. Currently, the country is the world’s No. 4 coal exporter.

Friday, March 30, 2012

Gold Blossoming in Colombia

Impressed by Colombia as a country and as a setting for exciting mining and geological opportunities, Paul Harris relocated from England, by way of Chile, and hasn't looked back. In an exclusive interview with The Gold Report, the publisher of the Colombia Gold Letter offers hope for the near future.

The Gold Report: Colombia's mining and energy sectors received about $12 billion (B) in foreign direct investment (FDI) in 2011, making it the largest recipient of FDI relative to gross domestic product of any country in Latin America. Although there are excellent geological potential and dozens of junior mining companies exploring Colombia, not one of those juniors has successfully permitted a mine. Does the country risk losing some of that free-flowing capital if it doesn't start to permit mines?

Paul Harris: No. The majority of that $12B you mentioned is in the oil and coal sectors. Gold is still in its infancy. Colombia enacted a mining code in 2001, so the mine permitting provisions within that code haven't been tried and tested before, but there is apprehension about how those provisions will perform when companies do put them through their paces. A couple of projects are rapidly approaching permitting. Continental Gold Ltd.'s (CNL:TSX) Buriticá is one of those as is the AngloGold Ashanti Ltd. (AU:NYSE; ANG:JSE; AGG:ASX; AGD:LSE)/B2Gold Corp. (BTO:TSX; BGLPF:OTCQX) Gramalote joint venture.

Wednesday, March 14, 2012

Tao Minerals to Commence Trenching Program at El Colmillo Property

MEDELLIN, COLOMBIA- Tao Minerals Ltd. (TAO) (OTCQB:TAON) reports that based on positive gold sample results documented in the independent geologic report prepared by LatAm Resources, the company will be commencing a comprehensive trenching program at the El Colmillo gold project. The fourteen samples assayed by the independent SGS laboratory in Lima, Peru were very positive with gold being present in all 14 samples, and with several showing significant gold concentrations up to 128.61 grams per metric ton. The proposed trenching program will check the true length of the veins currently identified inside of the El Colmillo concession with the objective of defining the drilling targets accurately with the least amount of risk.

The trenching program will open a trench each 100 meters following the strike of the seven (7) identified veins. The inferred length for each of these veins inside the concession is 1500 meters so it will be necessary to open 15 trenches in each vein. Additionally, Tao will open the old artisanal mining tunnels located inside the concession. A systematic sampling program will be performed in these tunnels as well as the trenches to determine the optimal drill targets.

Tao's El Colmillo Project is located in the North of Antioquia State as part of the Bajo Cauca Mining District (DMBC), covering a total area of 294 hectares in one mining concession (MC) 6927. The municipalities within the DMBC have all been recognized for their long vocation of gold mining, both underground and alluvial.

Tao Minerals Ltd. is a mining exploration and development company formed to acquire, develop, and exploit natural resource properties focusing primarily on the rich, yet highly underdeveloped gold deposits of Colombia in a socially and environmentally responsible manner. As a corporation, arriving early to the boom in the expansion of natural resource development in Colombia has enabled Tao to establish itself in Colombia over the past six years, becoming adept at the necessary legal and political processes and hiring highly qualified personnel in the geological, legal and security professions.

Notice regarding forward-looking statements

This news release contains "forward-looking statements", as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the expectation of low cost opportunity, the final terms of the acquisition and the gold production of the property to be acquired. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with mineral exploration. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-KSB for the 2010 fiscal year, our quarterly reports on Form 10-QSB and other periodic reports filed from time-to-time with the Securities and Exchange Commission

Tuesday, March 6, 2012

Colombia coal production to reach 120Mt in 2014, says Minister

TORONTO ( – Colombia is targeting growing coal production from 97-million tons this year to 120-million tons a year by 2014, Colombia Minister of Mines and Energy Mauricio Cardenas Santa Maria said on Monday.

Also, the flood of junior companies scouring the country for gold has been “amazing”, he commented in an interview. “You’re tempted to say it’s a gold rush. Suddenly, everyone wants to be in Colombia.”

Last year, the world’s fourth largest coal producer saw output climb to 84.7-million tons – a 13% increase on the figure for the previous year, as companies including Anglo American, BHP Billiton, Xstrata and Glencore expanded their operations.

Production would stabilise following 2014, Cardenas Santa Maria said in an interview.

Mining investment in the South American country reached $4-billion last year, which was roughly evenly split between coal and gold.

Investment was “probably reaching a peak that will be a challenge to sustain”, Cardenas Santa Maria told Mining Weekly Online on the sidelines of the PDAC convention in Toronto, where a record of around 30 000 attendees are expected this year.

“But I don’t think it’s likely that we see a major decrease,” he commented.

Colombia has introduced new legislation that sets aside 2.9-million hectares of land as “strategic mining zones”, which it will auction off to companies to explore and develop in 2013, following a similar approach to what it has done in the oil and gas sector.

To put that in context, miners and explorers currently hold 9 100 titles represent 5% of Colombia’s territory – the 2.9-million hectares being put up for auction next year will account for 4% of the country’s territory.

Companies will place bids on mineral blocks, which will be judged on how much they intend to invest in exploration, while the government will also seek to get a percentage of sales revenues from a mine, on top of royalties, Cardenas Santa Maria said.

The different judging criteria were “still up for discussion”.

The country has declared land containing potential coal, gold, copper, silver, platinum, magnesium, phosphates, uranium and coltan as strategic.

The reason for introducing the new legislation was a lack of controls of issuing licences under the old system, where some companies speculated on properties and then resold them to turn a quick profit, Cardenas Santa Maria said.

Saturday, March 3, 2012

AngloGold Ashanti reiterates that La Colosa will not affect water resources

The development of South African miner AngloGold Ashanti''s (NYSE: AU) La Colosa gold project in Colombia''s Tolima department will not affect water resources in that part of the country, the company''s president in Colombia, Rafael Herz, told ...

"We are making progress on studies that will allow us to determine that water use in a potential production phase will be much less than what we thought before. [Water for] domestic or agricultural use in the area wouldn''t be affected [in terms of] quantity or quality," Herz said.
The company, which is advancing a prefeasibility study on La Colosa, is also carrying out exploration work that uses a minimal amount of water.

"We are using rainwater or water transported [by tanks], and we currently have some minimal concessions to be able to use an amount of water that is equivalent to what a country house uses," he said.

Exploration at La Colosa resumed in 2010 after it was suspended in February 2008 due to government restrictions regarding forest areas. Last year, the company received authorization to use nearby water resources instead of transporting water to the mine.
Herz recently told  that the company expects to make a decision on developing La Colosa in 3-4 years.

"Within 3-4 years, we expect to have all of the evidence to be able to look at, on the one hand, the technical and economic feasibility of the project, and on the other hand, and most importantly, the social and environmental viability," Herz said.

So far, AngloGold Ashanti has invested US$280mn in La Colosa, according to local press reports.
AngloGold Ashanti, which estimates that La Colosa will produce at least 700,000oz/y of gold, expects to invest US$310mn over the next three years in the project and in its projects in the departments of Antioquia, Caldas, Cauca, Nariño and Bolívar.

Wednesday, February 29, 2012

AngloGold to make decision on US$3.5bn La Colosa gold project in 3-4 years

South African miner AngloGold Ashanti (NYSE: AU) expects to make a decision on developing its La Colosa gold project in Colombia's Tolima department in 3-4 years, the company's president in Colombia, Rafael Herz, told ...

"Within 3-4 years, we expect to have all the evidence to be able to look at, on the one hand, the technical and economic feasibility of the project, and on the other hand, and most importantly, the social and environmental viability," Herz said.

The company is currently working on the prefeasibility study, as well as on technical engineering and infrastructure studies.

The prefeasibility work will take about two years, and by mid-2015 there will be a feasibility study
and decisions will have to be made "not just by the company but also by authorities on the project's viability," Herz said.

The company announced a delay to the development of the project in May 2011, pushing back first production to 2018 and not 2016 as originally planned.

Project costs were also bumped up to US$3.5bn from US$2.7bn due to problems with obtaining permits, the company said at the time.

AngloGold Ashanti, which estimates that La Colosa will produce at least 700,000oz/y of gold, expects to invest US$310mn over the next three years in the project and in its projects in the departments of Antioquia, Caldas, Cauca, Nariño and Bolívar.

Friday, February 24, 2012

No more first come, first serve for granting mining concessions in Colombia

Colombia’s President, Juan Manuel Santos, announced yesterday that the country will be issuing a new mining code to boost the industry and reinforce control of illegal mining, reports local newspaper El Universal.

As a first measure, Colombia’s government has defined 313 strategic mineral areas totalling 2.9Mha and located in 15 departments, said Santos.
Mining permits in the country currently cover 5Mha, so the new mining zones are equivalent to 60% of what is currently assigned for mining development.

According to Mines and Energy (Minminas) minister Mauricio Cardenas, the zones will be awarded through a selection processes that will encourage healthy competition in the sector, allowing for the development of projects of all sizes that comply with the with the standards of social and environmental responsibility.
Cardenas added that this would eliminate the traditional first-come, first-served system for granting concessions.

“We’re doing away with the Ingeominas [now the national geological service] system and replacing it with objective criteria that are backed by the national mines agency,” Cárdenas said.
“All the work we’ve been doing helps us send a powerful message for investor confidence,” Santos said, adding that Colombia has plenty of space for large-scale miners that are willing to work in favour of the country’s development.

Thursday, February 23, 2012

Govt designates 2.9Mha for mining development - Colombia

Colombia's government has defined 313 strategic mineral areas totaling 2.9Mha and located in 15 departments, according to President Juan Manuel Santos.
Mining permits in the country presently cover 5Mha, so the new areas are equivalent to 60% of what is currently allocated for mining development, Santos said.


The mining areas will be awarded through objective selection processes to encourage healthy competition in the sector and allow for the development of projects of all sizes that comply with the standards of social and environmental responsibility, Santos said.
Mines and energy (Minminas) minister Mauricio Cárdenas said that this would eliminate the traditional first-come, first-served system for granting concessions.
"We're doing away with the Ingeominas [now the national geological service] system and replacing it with objective criteria that are backed by the national mines agency," Cárdenas said.
At the beginning of February, Minminas declared gold, platinum, copper, phosphate ores, potassium ores, magnesium ores, metallurgical and thermal coal, uranium, iron and coltan as minerals of strategic interest.

After the classification was made, the national geological service (SGC) drew up the borders of areas with strategic reserves and the Colombian government reserved these areas to begin awarding concessions.
"All the work we've been doing helps us send a powerful message for investor confidence," Santos said, adding that Colombia has plenty of space for large-scale miners that are willing to work in favor of the country's development.
Santos was speaking at the opening of the first large-scale mining conference that is being held in Cartagena from February 23-24.