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Maria Constanza GarciaPresident
March 2013
THE NATIONAL AGENCY OF MINING IS THE POINT OF ENTRY FOR COMPANIES CONDUCTING MINING BUSINESS IN COLOMBIA
STRONGER AND CLEARER ORGANIZATIONS: Structure of the Mining sector
National Agency of Mining
Colombian Geological Service
Monitoring Markets& Sector Planning
Deputy Minister of
Mining
Deputy Minister of
Energy
Entities with specific functionsEntities with specific functions
Minister of Mining and Energy
Mining Authority
Subsurface Knowledge
Mining and Energy Planning Unit
PresidentLegal Office
Office of Technology and Information
Internal Controls Office
Vice President of Contracting and Titles
Vice President of Monitoring, Control
and Mine Safety
Vice President ofPromotion and Development
Vice President of Administration and
Finance
Registry Management
Management of Mining Titles
Management of Mine Security and
Rescue issues
Management of Monitoring and
Control
Royalty Collection Management
Management of Small and Medium
Scale Mining
Promotion Management
Board
ORGANIZATIONAL STRUCTURE OF NAMMining Authority
Promote and encourage development of mining.
Management of mineral resources for and on behalf of the state.
Hold, manage and track concession and mining rights for exploration and development of minerals.
Managing the national mining registry.
Calculate, collect, manage and transfer royalties and compensation.
Article. 4 Decree
4134/2011
MAIN FUNCTIONS
OPPORTUNITIES IN COLOMBIA Colombia is a destination for investment
Countries that attract investment in the
mining sector
Source: (Graph 1) Corporate Exploration Strategies 2012, Economic Metals Group- MEG. (Graph 2) Survey of mining companies 2011/2012 (25 countries) by theBehre Dolbear Group.
Top destinations for exploration investment
25% of the global exploration budget
57 52 5145 43 41 39 37 36 36 33 32 32 30 29 29 28 27 26 25 22 22 19 17 16
*(Rank 7/25)
OPPORTUNITIES IN COLOMBIAThere are 50 new investment projects in 13 reigons
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0
2,000
4,000
6,000
8,000
10,000
12,000
2,9 3,3 3,24,0 4,1 4,5 4,9 5,0 5,2 5,4 5,4
5,8 6,2Mining GDP
+5,9%
Source: National Bureau of Statistics - DANE. Mining and Energy Planning Unit-UPME. Ministry of Mines and Energy.
Coal Production
20002001
20022003
20042005
20062007
20082009
20102011
20122013
2014 -
20
40
60
80
100
120
38 44 39 50 54 60
66 70 74 73 74 86 89
110 114
Historical ProjectedMiT
n
OPPORTUNITIES IN COLOMBIAMineral Production
Nickel Production Gold Production
Silver Production 2012 Regional Coal Production
2000 2001
2002 2003
2004 2005
2006 2007
2008 2009
2010 2011
20120
5
10
15
20
25
30
-30%-20%-10%0%10%20%30%40%50%60%70%
Tonnes
2000 2001
2002 2003
2004 2005
2006 2007
2008 2009
2010 2011
20120
10
20
30
40
50
60
-30%-20%-10%0%10%20%30%40%50%
Thousands of Tonnes
2000 2001
2002 2003
2004 2005
2006 2007
2008 2009
2010 2011
20120
10
20
30
40
50
60
70
-100%
-50%
0%
50%
100%
150%
Tonnes
GUAJIRA; 39%
CESAR; 52%
BOYACA; 3%
OTHER REIGONS 6%
OPPORTUNITIES IN COLOMBIAWe are ranked in the top 10 for worldwide producers and exporters of coal
PR ChinaUSA
India
Indonesia
South Afri
ca
Australi
aRussi
a
Kazakh
stan
Colombia
Poland
0
500
1,000
1,500
2,000
2,500
3,000
Top 10 Thermal Coal Producers
Indonesia
Australi
aRussi
aUSA
Colombia
South Afri
ca
Kazakh
stan
0
50
100
150
200
250
300
350
Top 10 Exporters of Coal
Source: http://www.worldcoal.org/resources/coal-statistics/.
The Mining sector has provided a significant source of economic growth for the Colombian economy
The Mining sector has provided a significant source of economic growth for the Colombian economy
What are we doing?
• Comprehensive Audit
Safety and Rescue
• Applications Backlog Processed
• Promotion and Development
Strategic Mining Areas
CON
TEN
T
By March 1: 1,759 reviews of
existing contracts for compliance with conditions
438 field inspections
330 comprehensive audit reports
Comprehensive Audit of all 9,500 mining titlesComprehensive Audit of all 9,500 mining titles
Support Activities of Comprehensive Audit
Group 1: HMV Engineers - GENIVAR ColombiaGroup 2: Bureau VeritasColombia,-Tecnicontrol and BVQI
• Up to 4** more than1,400 reports
4* annual visits to titles in the development stage 2 annual visits to titles in the exploration stage 1,400** comprehensive audit reports per month 100% of mining titles fully audited this year 2% of royalties assigned to review process costs
CAD$191 M
COMPREHENSIVE AUDITNew Approach
850
CAD$5.6 million
Rescue workers (National Mining Rescue)
Contract awarded to purchase lifesaving equipment (breathing apparatus)
Emergencies attended
Accident prevention visits to mine title holders
101
564
SAFETY AND RESCUEAll emergencies attended
Promote a culture of accident preventionPromote a culture of accident prevention
• Comprehensive Audit
• Applications Backlog Processed
• Promotion and Development
Strategic Mining Areas
What are we doing?CO
NTE
NT
By March 1: 11,361 Requests
evaluated (58%) 977 titles
granted Processed all
applications for temporary licenses
19,629 requests evaluated by mid year19,629 requests evaluated by mid year
Re-open applications system New registration information system Migrate geographic information system to Magna – SIRGAS Evaluate locations available for new mining activities
Delegated; 5,178
NAM 14,451
19.629 requests (feb. 2011)
Processing8,268
Processed 11,361
=
APPLICATIONS BACKLOG PROCESSED19,629 Mining Application Requests
• Comprehensive Audit
• Applications Backlog Processed
• Promotion and Development
Strategic Mining Areas
What are we doing?CO
NTE
NT
52 signed contracts for legalization of traditional mining activities since June 2012
(Antioquia, Boyacá, Caldas, Caquetá, Cundinamarca, Guajira, Meta, Santander, Sucre and Tolima)
Legalization of traditional mining activities and technical support to SMEs
Legalization of traditional mining activities and technical support to SMEs
Support sessions for legal transition to formal economy (Boyacá, Antioquia, Córdoba, Cundinamarca and Huila)
Support forums for provision of additional training: Guainía, Cauca, Vaupés, Vichada and Putumayo
PROMOTION OF SMALL AND MEDIUM SCALE MINING
Comprehensive approach: social, environmental, economic and legal
New scheme to contract extensionsNew scheme to contract extensions Cerro Matoso S.A
Paz del Río Mining S.A. (Iron & Coal)
TRANSPARENCY AND CERTAINTY
Cerro Matoso changed the way to negotiate contracts
Coal Agreement with Paz del Río (Votorantim) total value of CAD$7.3 bn
New Agreement with Paz del Río Mining totals CAD$7.3 bn
Cerro Matoso shows the way for new mining contracts
What are we doing?
• Comprehensive Audit
• Applications Backlog Processed
• Promotion and Development
Strategic Mining AreasCON
TEN
T
STRATEGIC MINING AREAS (SMA): Background
Date LandmarkJun. 16, 2011 National Development Plan
Jan. 30, 2012 Determination of Minerals of Strategic Interest
Feb. 24, 2012 1st determination of SMA
Jun. 21, 2012 2nd determination of SMA
Oct. 2012 Geochemical sampling of SMA
Dec. 2012 Tender process for geophysical exploration of SMA
2013 Structuring the process and inter-agency coordination
Strategic Mining Areas (SMA) contracts awarded through a competitive process which seeks greater total benefits through increased investment and production.
Encourage the exploration and development of mineral resources, fulfilling international, social and environmental standards
Encourage the exploration and development of mineral resources, fulfilling international, social and environmental standards
19
Geoscientific data compilation
Structuration process
Launching the Process
1st Competitive Process
Semester 12013
Semester 22013
2014
STRATEGIC MINING AREAS (SMA): Stages
Geological mapping and exploration methods - not ground disturbing (CGS)
Prospecting and exploration
Development
1st Competitive Process of SMA
STRATEGIC MINING AREAS (SMA): Scope
21
STRATEGIC MINING AREAS (SMA): Inter-Agency Coordination Scheme
1. Single channel communication under the liaison model
2. Formal and informal relations to facilitate routine inter-agency cooperation
3. Joint training to foster understanding of each agency’s role
4. Mechanisms for sharing data5. Common language and unified messages6. Environmental and social assessments7. Technical input for the Competitive Process
1. Single channel communication under the liaison model
2. Formal and informal relations to facilitate routine inter-agency cooperation
3. Joint training to foster understanding of each agency’s role
4. Mechanisms for sharing data5. Common language and unified messages6. Environmental and social assessments7. Technical input for the Competitive Process
Thank you