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Colombia´s leftist candidate predicts mining collapse

03 May 2018 20:43 (+01:00 GMT)
Colombia´s leftist candidate predicts mining collapse

Bogota, 3 May (Argus) — Colombia's leftist presidential candidate Gustavo Petro appears to have softened his stance toward open-pit coal mining that is a backbone of the Colombian economy.

The candidate told Argus that he will not ban large-scale open-pit coal mines, but such mines are destined to shut down anyway because the global economy is switching from fossil fuels to renewable power generation. The Colombian economy will "detach from" coal and oil production under his presidency, he said.

Petro, the former mayor of Bogotá and a nemesis of Colombia´s business community, is running second in polls ahead of the first round of voting on 27 May. A likely run-off will be held on 17 June.

The candidate´s position on the mines contradicts his campaign materials which state that "Petro will not allow large-scale open pit mines nor fracking."

He said the economy will gradually migrate away from large-scale coal and oil production to agriculture, manufacturing and clean energy.

"We propose moving towards a model that turns Colombia into an agricultural and environmental power, and allows the integral development of manufacturing and agriculture. That is to say, we propose the opposite of what is happening in both Venezuela and Colombia today," said the candidate, alluding to criticism that his policies would lead Colombia down the ruinous path of neighboring Venezuela.

Petro, a former guerrilla who transitioned into life as a politician more than a decade ago, predicted that coal prices will collapse because China will gradually stop using coal for power generation, driving coal miners out of Colombia and collapsing prices, "generating a social disaster mainly in the provinces of Cesar and La Guajira."

Petro predicted that Drummond, the country's largest coal miner, will not be able to sell its Colombian coal assets, because global demand for coal is falling, reducing the appetite for such assets.

Drummond has not commented on Petro´s remarks. But the firm´s chief executive and head of the Colombian mining chamber, José Miguel Linares, said today at the opening of a mining congress in Cartagena that renewable energy projects will take time, during which "the world will continue depending on oil and coal. Facing this scenario, it makes no sense for Colombia not to take advantage of its wealth."

Petro denounces such positions. He blames coal miners in northern La Guajira province, home to the Cerrejon and La Caypa mines, for depleting scarce water resources. "In La Guajira, hundreds of children are dying because water has been taken by mines. This is a clear example of social inequity," he said.

La Guajira hosts Colombia's largest indigenous population with more than 400,000 Wayuu people, who live in impoverished communities scattered throughout the desert peninsula. Child mortality is notoriously high.

Foreign investors would find better returns in the development of electric railroads, metros, agriculture, industry and agribusinesses, he said.

Petro has tried to distance himself from the government of Nicolas Maduro in Venezuela, and shuns the socialist label. He has pledged a tax reform that will slap levies on the repatriation of the net profits of foreign companies operating in Colombia. Taxes would also be imposed on imported machinery run on fossil fuels. He also plans to lift income tax exemptions on economic sectors such as hotels.

Petro is running second to Iván Duque, a youthful pro-business candidate endorsed by influential former president Alvaro Uribe.