Colombia approves 1st Cu contract in mining push

Colombia has approved its first exploration and production copper contract as part of five copper and metallic mining blocks launched earlier this year in the government 's push to diversify mining away from coal.

Block 4, located in the coal-rich province of La Guajira, was awarded to mining company Carbomas under a 30-year contract, Colombia's mining agency ANM said. The block spans an area of 470,000 hectares (1.16mn acres) in the municipality of La Jagua del Pilar.

Carbomas has committed to invest 3.75bn Colombian pesos ($1mn) in exploration. Under the royalty scheme, Carbomas will pay 5pc in compensation in addition to royalties, which will be triggered during periods of high copper prices.

The contract also provides for the possibility to include a prospecting phase prior to exploration. And it grants benefits if exploration times are reduced, allowing production to start earlier than planned.

Carbomas is a growing producer and exporter of steam and metallurgic coke from Norte de Santander department in Colombia.

Colombia produces only around 10,000metric tonnes/yr of copper from one mine, Canada's Atico Mining's El Roble mine in Choco department. Several other projects await environmental licenses. The $1.4bn Quebradona project, controlled by South Africa's Anglo Gold Ashanti, is expected to start production in 2026.

Colombia has 2.87bn lbs of probable copper reserves, 6.06bn lbs of indicated copper reserves and 8.44bn lbs of inferred reserves, according to ANM

Only 2.9pc of Colombian territory has mining permits, and applications for mining permits have been submitted for an additional 7.9pc of its territory, ANM president Juan Miguel Durán said at a recent mining conference in Canada. In Colombia, most of the 39 copper and gold projects are in exploratory phase.

By Diana Delgado