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“The Mining Industry Should Drive the Growth of other Economic Sectors”: Jose Miguel Linares:

Bogotá, May 4, 2018

On May 3 and 4, Cartagena de Indias was the stage for the Mining Congress organized by the ACM for the last four years.

For two days, public and private sector leaders and the mining industry met in the ‘Heroic’ city to talk about current and future conditions for mining in the country. Inaugurated by Jose Miguel Linares, President of the Board of Directors of the ACM and of Drummond Ltd., this latest encounter focused on innovation, ability to compete, and development, analyzing the situation of mining in Colombia and the important challenges it must rise to in order to continue to contribute to the country’s economic growth.

One of the most striking messages was related to the nation’s great wealth in minerals, that, if efficiently used, can act as an engine fomenting the growth of other industries, which, as a group, will diversify the economy in all regions of Colombia.

For this to be possible, “the approach to the mining sector must be integrated to include the legal framework, tax issues, and the environmental, political, social, and economic arenas. This should allow us to objectively analyze – with the proper technical and regulatory support – our reality,” indicated Linares during his speech.

A Responsible Industry

According to official sources, in the last 10 years hydrocarbon, energy, and mining companies have represented on average 9% of the GDP, 63% of exports, and close to 46% of direct foreign investment.

These figures underline the sector’s importance for local development. It is for that reason that “the Colombian government must not fail to create incentives for a responsible extractive industry in a country with monetary poverty of 27.8%, an unemployment rate of 9%, and a subjective underemployment rate of 29.2%. Above all it cannot dismiss an activity that generates close to 350,000 direct jobs and 900,000 indirect jobs,” emphasized the high-level executive.

The presence of mining companies in the country is also a source of significant contributions to development and social improvement plans. Specific cases are found in the departments of Cesar and La Guajira, where mining represents 46% and 55% of the GDP, respectively.

In addition, they undertake important programs to improve community, educational, and healthcare infrastructure, initiate social, cultural, and productive projects, and protect the environment.

Four Reflections from the Conference

In the midst of an election year that has led to debates on mining in the country, the sector requires important decisions by the State in order to continue to play a decisive role in the economic and social development of our country.

  1. In terms of ability to compete, clear and stable policies are necessary that will provide legal certainty for the mining industry in Colombia, a topic that takes on special relevance for investors when they are deciding where to set their sights.
  2. Judicial rulings relative to public consultations have made the context of the sector more complex. Although it is important to listen to communities, respect their rights, and procure their well-being, the future of the country cannot depend on the will of the inhabitants of one or a few municipalities, when mining projects benefit millions of people.
  3. The substantial decrease in the percentage of royalties received by the producing regions has caused the regions to lose interest in mining projects and not see the benefits of the activity.
  4. Illegal mining and blockades of mining products outside the country are practices that represent a serious assault on the reputation of extractive companies, even having a negative impact on the image of the country itself. Attacking these problems for the domestic economy is urgent and is everyone’s responsibility.

Lastly, a call was issued to everyone involved in the industry and high-level government officials to join forces to continue to promote Well Done Mining and to improve the perception of this industry in international markets.