Año 1 Edición 25 Página 12
Año 1 Edición 25 Página 12
OVER 2,000 APPLICATIONS ON JULY 2
PROGRESS AT A HIGH ATTRITION COST
The opening of the mining applications system is great news for the industry but the process has not have an investment friendly execution .
1 ) Rules for application : Announced one week before the opening including :
Source : OPHIR MRI
The National Mining Agency ( ANM ) new filling system succesfully received more than 2,000 applications in the first hours of July 2 . Under the new regulations , the critical requirements to apply to a mining contract in Colombia , for a non-strategic area , is the following :
1 ) Online application through the National Mining Agency webpage
2 ) Physical delivery of technical documentation supporting the proposal including map and Minimum Exploration Program
3 ) Physical delivery of documents supporting the investment , including certification of economic capacity to perform exploration program
The ANM registers the turns in which applicants participate , and one day after the application the final report with areas requested is published .
The lapse for a resolution can vary from 3 to 6 months according to ANM officials , based on the remaining processes to be atended .
With the new process , the cascade effect ( second propsoal being revised after the first one is rejected ) is nullified , allowing free areas to be available to the public sooner .
Resolution 428 : Establishing the minimum investment requirements to consider an exploration program acceptable . This is an important effort by the ANM but needs refining as some criteria are formulated on an area basis and soar prices for critical activities such as drilling . This requires a more selective analysis .
Decree 1300 : Establishing the financial muscle of the applicant . Based on the above , many developers have to reduce their areas ( increasing risk ) or make a proposal with unreal considerations , which leads to frozen areas during the evaluation period .
In addition , focusing on borrowing capacity or requiring a bank certification as warrant is unreasonable as banks do not invest in mining exploration . While this left room only to developers with strong institutional support , opens the door to discuss about organized investment in mining in Colombia .
2 ) Exclusion areas : The Ministry of Environment announced the Decree 1374 establishing areas to be excluded from new mining titles , for a period up to two ( 2 ) years .
In theory , the ANM could grant one of this areas to be explored ( concession contract ), with the risk of it being declared a no-mining zone in the next 2 years . This is a very un-friendly posture , and based on this , concession contracts in these areas should not obligate investment until its status is defined .
The map showing these areas ( see next page ) was realeased one business day before the opening bell for applications , giving virtually no time to adjust corporate strategies .
The fact that the Ministry of Environment can interfere in the mining business at any point with a new decree with no scientific support , like this one , is concerning . With nearly US $ 1.2 million invested in new applications , it is being time to clearly define no-mining areas .
Opinions expressed in this report accurately reflect autor ’ s personal opinion about the company of concern . Also , the author certifies that he has not received , is not receiving and will not receive any direct or indirect payment in exchange for expressing a specific opinion