REPUBLIC OF COLOMBIAMINISTRY OF MINES AND ENERGYMINING-ENERGY PLANNING UNIT
[UNIDAD DE PLANEACIÓN MINERO ENERGÉTICA]

THE MINING SECTOR PROFILE
Colombian emeralds are known and recognized worldwide for their extraordinary
quality and beauty.
Colombia is the world’s fifth largest thermal coal exporter.
The mining activity in the country is entirely carried out by the private sector; to agreat extent, its development has influenced the involvement of major foreign
investors like Drummond, BHP Billiton, Glencore, Amcoal and Rio Tinto. Thesecompanies have executed large-scale exploitation/development projects.
The country hast a vast geological-mining potential, ready to be exploited.
The presence of diverse geomorphologic environments allows the development of awide variety of minerals and metals of significant economic interest:• Precious Metals and stones: gold, silver, platinum, emeralds• Metallic: nickel, copper, iron, manganese, lead, zinc, and titanium minerals.
• Non-metallic: land salt, sea salt, gravels, sands, clays, limestone, sulfur, barite,bentonite, feldspar, fluorite, asbestos magnesite, talc, gypsum, phosphoric
rock, and ornamental rocks.
• Combustibles: CoalFor the country’s internal economy, the mining industry’s performance has been adeterminant factor in the past few years.
Structure of Colombian Exports, 2004
MINING SECTOR
Exports
US$ Million% of the national total
Foreign Investment
US$ Million% of the national total

2002

2003

2004*

1.524
12,80%

2.630
20,25%

2.645
20,17%

Oil
25,44%

Coffee5,78%

Coal
11,20%

Ferro-nickel
3,81%
Gold
3,39%

466
22,05%

627
35,00%

922
43,53%

Agriculture
9,70%

SectorGDP/TotalGDP1,90%
2,53%
2,58%
Sources: DANE, Banco de la República (Central Bank),
UPME Calculations*Figures as of the third quarter

Industry
39,03%
Source: DANE, UPM E calculations

Foreign Direct Investment flow in Colombia
Share per sector, 2004

Construction 1,2%
Ind.
Manufactureras
7,7%Electric, gas andw ater 1,3%

Agriculture 0,7%

MiningSector
43,5%
Source: Balance of payments, Banco de la República
UPM E Calculations , Data as of sept 2004

Emeralds
0,45%

Trade, restaurants
and hotels 4,3%

Transp., storage andcommunic. 5,4%
Financial 2,8%
Community, social
services 2,3%

Petroleum 30,7%

Rest of mining
1,20%
To tal M ining: 20,06%

REPUBLIC OF COLOMBIAMINISTRY OF MINES AND ENERGYMINING-ENERGY PLANNING UNIT
[UNIDAD DE PLANEACIÓN MINERO ENERGÉTICA]

Special Foreign Investment Regime
For mining sector rules a more favorable and flexible exchange control system than theordinary regime.
• Investments in the sector are subject to compliance with the rules envisaged inthe Mining Code and the conditions set forth in the contract made between theresponsible state entity and the investor.
• No obligation to refund into the country any exchange relating to sales of coal,
ferronickel and uranium made in foreign currency.
• The opportunity to make and pay contracts in foreign currency.
Clear Rules of the Game
The mining activity in Colombia is governed by a modern Mining Code; it establishes a
set of transparent and stable rules of the game for both national and foreign investors,
while clearly delimiting the function of the State as a facilitator, regulator andpromoter of private investment aimed at the sector’s development. Among otheraspects, the following are worth highlighting:•••••••••The “first in time, first in right” principle.
The consolidation of exploration and exploitation/development rights into asingle mining title (the concession contract).
Unrestricted negotiation of mining rights.
Simple administrative formality procedures.
Simultaneity in mining and environmental licensing procedures.
A global environmental license (for all the phases envisaged in the process).
Taxation stability (royalties and surface cannon) during the life of the contract.
A 30-year contract term extendible for an equal period.
Administrative silence.

An Attractive Geological Potential
In geotectonic and metallogenic terms, Colombia has a quite privileged position in its
sharing of two very promising geological environments: the Guyana System, and theAndean System. The application of modern systematic exploration techniques in areas
with a rich potential of mining resources enhances the possibilities of generating
projects of significant economic importance.
POTENTIALITIESMinerals and metals ofTypes of deposits
economic interest
Metaconglomerates
Au, ULodes
Au
Kerogen
Au
Recent placers
Au
Iron Formation
Fe
Recent PlacersDiamonds
Bauxites
AlRare earths (Ce, La, Cb,Carbonatites
Ta, Nb, Y)
Sedimentary,
Ornamental stones
metamorphic, igneousBlack sands
Ti and rare earths

REPUBLIC OF COLOMBIAMINISTRY OF MINES AND ENERGYMINING-ENERGY PLANNING UNIT
[UNIDAD DE PLANEACIÓN MINERO ENERGÉTICA]

The Guyana System: located in the Colombian eastern zone, it embodies the eastern
plains known as the Llanos Orientales and the Colombian Amazonian region. In thepast few years, it has created great expectations not only in the light of the size of its
enormous geographical area (over half a million km2), but also due to theacknowledgement of significant deposits of iron, aluminum, diamonds, rare earths andmanganese located in neighboring zones of Venezuela and Brazil, very close to theColombian borders.

REPUBLIC OF COLOMBIAMINISTRY OF MINES AND ENERGYMINING-ENERGY PLANNING UNIT
[UNIDAD DE PLANEACIÓN MINERO ENERGÉTICA]

The Andean System: Connected with the Circum-Pacific Belt [“CinturónCircumpacífico”], it extends across five countries, Argentina, Chile, Bolivia, Peru andEcuador, with a well-acknowledged mining development. In Colombia, it is shaped by
the three - western, central and eastern - ranges: the Cordilleras Occidental, Centraland Oriental, and the mountains of Sierra Nevada de Santa Marta and the Serranía dela Alta Guajira. A high mineral extraction potential can be found in this system.
POTENTIALITIESANDEAN SYSTEM

RegionCordillera Occidental(Western MountainRange)

Cordillera Central(Central MountainRange)

Sierra Nevada deSanta Marta

Peninsula of LaGuajira

Cordillera Oriental(Eastern MountainRange)

Deposit Type
Volcanogenic mass sulfurs
Precious metal epithermal
Porphyries Cu Au
Placers
Sedimentary, igneous
Saprolites and placers
Precious metal epithermal
Porphyries Cu-Au
SkarnLaberites
VMS
Sedimentary
Sedimentary, metamorphic, igneous
Recent placers
Porphyries Cu-Au
Precious metal epithermal
Volcanogenic mass sulfurs
Iron Formation
Black Sands
Sedimentary
Sedimentary
Chipre (Cyprus)-type mass sulfurs
Precious metal epithermal
Evaporites
Precious metal epithermal
Sedimentary, metamorphic, igneous
Epithermal-type sedimentogenic
Sedimentary
Sedimentary
Evaporites
Sedimentary

Minerals and Metals of Economic
InterestCu, Pb, Zn, Au
Au, Ag, Cu, Pb, Zn, Pt
Cu, Au, MoAu, Pt
Ornamental stones
Corundum and garnets
Au, Ag, Cu, Pb, Zn
Cu, Mo. Au
Au, Ag, Cu, Pb, Zn, W, Mo, Fe, Marble
Ni, FeAu, Ag, Cu, Pb, Zn
Coal
Ornamental stones
Au
Cu, Mo. Au
Au, Ag, Cu, Pb, Zn
Cu, Pb, Zn, Au
FeTi and rare earths
Limestones
Limestones and Coals
Cu, Pb, Zn, Au
Au, Ag, Cu, Pb, Zn
Gypsum, halite
Au, Ag, Cu, Pb, ZnOrnamental stones
Emeralds
Coal, Phosphates
Limestone(s)Salt, Gypsum, Potash
Coking thermal coal

USEFUL LINKS:
The Ministry of Mines and Energy [“Ministerio de Minas y Energía”](www.minminas.gov.co)
The institution responsible for formulating and fixing the mining-energy sector
policies.
The Mining-Energy Planning Unit [“Unidad de Planeación Minero Energética”],
UPME(www.upme.gov.co)
An agency of technical nature in charge of advising the Ministry of Mines andEnergy, in the planning of the mining and energy sectors’ development
activities.
The Colombian Geology and Mining Institute [“Instituto Colombiano de Geología yMinería”], INGEOMINAS (www.ingeominas.gov.co)
The entity in charge of producing information on Colombian geological potential
and responsible for the administration of the national mining resources.