Bloomberg News

Colombia to Switch to Minerals Rights Auction Process Next Year

March 04, 2012

Colombia, the largest coal supplier in South America, will change the way it awards mineral exploration rights from next year -- forcing prospective companies to take part in auctions.

The changes will increase the benefits Colombia receives from mining as it seeks to boost production of minerals including gold, silver, platinum and copper, Mines and Energy Minister Mauricio Cardenas said in an interview in Toronto.

“It’s going to be a more competitive process, a selection based on objective criteria rather than first come, first served,” Cardenas said yesterday in an interview in Toronto at the Prospectors and Developers Association of Canada convention.

President Juan Manuel Santos has attracted companies owned by billionaires Carlos Slim and Eike Batista to Colombia by cracking down on guerrilla groups and opening new areas to exploration amid rising global demand for energy and gold.

The selection criteria for the auctions that will begin in 2013 haven’t been fixed yet, Cardenas said, who added that gold output may increase under the new regime.

“Our early victory, I think, is going to be gold,” he said. “That’s where we are going to have more reserves and we are going to have more production soon,” he said.

The government is willing to debate proposed changes to mineral taxes and royalties but its preference is to maintain “stability” and he doesn’t anticipate any major changes to legislation, he said.

To contact the reporter on this story: Liezel Hill in Toronto at lhill30@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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