By Edwin Bohórquez, EL ESPECTADOR, March 22, 2023
(Translated by Eunice Gibson, CSN Volunteer Translator)
(Some charts and graphs and other references will be omitted.)
It’s Wednesday, the day EL ESPECTADOR explains things. There’s a debate that’s been going on for years, but it increases from time to time when, sadly, we have to register the deaths of mining workers in Colombia, and the country focuses attention on the occasional tragedy. It’s not new; on the contrary, mining makes up part of the history of this country, and we have built the national economic model on it, with all of the positive and negative consequences that has brought.
Therefore, the subject we are going to develop in this news bulletin is mining, because we are seeing protest demonstrations in Bajo Cauca, indigenous and campesino demonstrations, companies that are choosing to move their investments, and a policy coming directly from the President, who has sent clear messages ever since his campaign.
As is our custom, we go back a little bit. On December 7, 2022, our colleagues in the Environment section published some data that, besides the statistics, turned our attention to the present, to reality:
“Of the nearly 7,200 mining titles in effect, there are 1,816 that are superimposed on restricted or excludable areas; that means they are in areas where they aren’t supposed to be. Of that number, 878 (48%) don’t have environmental instruments [1](or they have not been reviewed). Another 77% (1,404) don’t comply with the requisite document that shows they took the required training (or the document has not been reviewed). The remaining 9% have fulfilled all the requirement for royalties.”
Yes, there are several ways to read this, such as that in Colombia more than 25% of the mining titles are in areas where mining shouldn’t be done, according to the National Mining Agency (ANM). In the words of the Agency’s President, Álvaro Pardo, it was clear that the administration’s position is, “Never again will a mining title be issued in an area where there are environmental restrictions.”
As of October 31, 2022, miners in Colombia owed the country 303,376 million pesos (roughly USD $64,000,000) in royalties. Some of those debts are more than 3 years old and amount to nearly 250,000 million pesos (roughly USD $53,000,000).
On the same day that ANM reported that there would be a reform in the Mining Code—issued nearly two decades ago—based on the discussion that Colombians want to have about natural resources, what’s happening with climate change, and among others, what happens when a company closes down a mine or stops mining, recalling the case of Prodeco, a subsidiary of the multinational, Glencore, that returned the mines in Calenturitas and La Jagua in Cesar Department to the Colombian government. It was calculated that more than 15 million tons of coal a year could be mined there, and they have not paid the environmental liability compensation, nor assured stability for the people that had worked there.
Pardo released another announcement of the same size: “There will be no more open pit coal mines in Colombia.” But he was clear in that the current contracts would be respected. In a nutshell, new open pit projects like the one that Cerrejón now has, will no longer have government support. This opens a new box of many variables, such as the matter of the environment, which has priority in this case; but the social and economic also come into play, not only for the people that are doing development here, but also for the money that this business provides for this country.
The messages from the Petro administration about the mining business were more than clear. But the matter goes further, and it has to do with energy transition. A strategy that is not new either, no, but it has gotten a much stronger push from the higher levels of the government now. On January 25, journalist María Camila Bonilla noted the speeches by the Mining Ministry in the World Economic Forum, when Minister Irene Vélez, during a panel discussion, said, “We have decided that we will not be issuing new contracts for gas and petroleum exploration.” Bonilla also went further and inquired about what was known at that time about the administration’s plan to follow the clean energy path. There was only “an official document” that gave “some clues”. In the text, called “Social dialog to define the road map for a fair energy transition in Colombia,” they said that, “the transition should be carried out through gradual substitution from fossil energy sources to renewable energy sources, guaranteeing the sovereignty and reliability of energy and the country’s economic stability.”
How did the discussion go in this country? We have to start with a base: more than 50% of Colombia’s exports depend on these extractive industries, and it’s not possible to change that overnight, because that would bring an economic crisis. But, besides the numbers, as we saw from the Court, in La Guajira, even remembering that we have been talking about energy transition since 1800, “when we went from using wood to using coal for energy.” It’s evident that now they want big changes in the energy matrix, including the sector that generates electricity, industry or transportation, so we will also explain what the transition we are talking about consists of.
Let’s go back to mining, the focus of this bulletin, although in the end, everything is connected, not just by the economic model we have been living in here in Colombia, but also because making changes in an area of this kind implies adjusting everything else.
Between the years 2013 and 2020, coal mining royalties reached 11,400,000,000 pesos (roughly USD $2,400,000 at today’s exchange rates), 25% of total royalties in Colombia. For La Guajira Department, coal royalties reached 3,400,000,000 pesos (roughly USD $718,000 at today’s exchange rates). Cerrejón is the largest coal mine in South America and one of the largest in the world. The Cerrejón operation is located between the municipalities of Albania, Barrancas and Hato Nuevo in La Guajira Department. It was founded in 1975 and, since 2021, Glencore owns 100% of the mine. The contracts will expire in February 2034.
For the March 4 edition, the Business section of EL ESPECTADOR published an interesting analysis of this whole matter, with a special focus on petroleum production. It’s impossible to disentangle one from the other. They wrote: “Petroleum exploration is in good measure Colombia’s economic heartbeat. At the same time, the energy transition is an imperative for the planet, as well as for national production, which will also have to get beyond the dependence on mining-energy exploitation.”
According to the Colombian Petroleum and Gas Association (ACP), if the country were to stop producing gas and oil, the country would lose 18 billón pesos (roughly USD $3,800,000,000 at today’s exchange rates) in revenue between 2022 and 2026. By 2032, the revenue loss would reach 104 billón (roughly USD $22,000,000,000 at today’s exchange rates).
ACP also reports that 13% of the total national income comes from the oil industry, and that the average monthly value of petroleum exports increased by 40% between 2021 and 2022. Fedesarrollo (Foundation for Higher Education and Development) statistics show that 1.7% of Colombia’s GDP comes for petroleum activity.
For now, it’s known that if the plans for renewable energy are carried out, those of the whole of Latin America, and we talk about sun and wind energy, the region could have 319 new gigawatts[2] (GW) of installed capacity, “something like 132 times the capacity of Hidroituango” by 2030, and Colombia would be the country with the third highest increase in capacity in the coming seven years. In other words, the “region has the possibility of increasing by more than 460%” thegenerationofrenewables; itwouldbea “world energy giant”, according to Kasandra O’Malia, project manager at Rastreador Global de Energía Solarm and co-author of the new report by Global Energy Monitor.
So, with a little bit of the macro-economic panorama exposed, the country learned that two people were killed in the confrontation that took place in the early morning of Thursday, March 2, in the town of Los Pozos de San Vicente del Caguán, in Caquetá Department, when a group of campesinos and indigenous people faced the Armed Forces represented by the National Police in the installations of the Emerald Energy petroleum company. Specifically, the campesinos and the indigenous people were asking that the company pave 42 kilometers of the road, and also for some water, but everything got out of control. So much so that the Police ended up being arrested by the campesino guardians.
The next day the news came from Bajo Cauca in Antioquia, because a miners’ strike had blocked the road to the Atlantic coast and because the businesses in the area also were closed. Miners in Antioquia and Córdoba were the protagonists. They talked about 5,000 of them protesting. The reason: Iván Velásquez, the Minister of Defense, had been clear: “This order is peremptory: total war against criminal finances. Today, in the Bajo Cauca part of Antioquia, five large dredges that generated wealth for the illegal armed organizations have been destroyed.” Five days later, President Petro had to send five Vice Ministers to attend to the situation: the Ministries of Interior, Defense, Mines and Energy, Environment as well as the National Planning Department. Meanwhile, the conversation about the energy transition took its course and they talked about the creation of a mining district, but that got changed, finally, into a public order ruckus, because they were talking about the infiltration of illegal armed groups into the protest.
By March 10, the administration had to order the Armed Forces to open up the roads in Antioquia. That day we reported that the dialog between the Ministers of Defense, Interior, and Environment with the spokesmen for the miners’ strike ended without any agreements, and to that was added the government’s ordering of curfews in 12 municipalities in Antioquia.
But what’s behind all this? Informal mining, informal labor, exploitation of natural resources that belong to everyone, the presence of illegal armed groups like the Clan del Golfo living on these illegal profits. It’s a hotbed that has gone on for decades without any clear solution.
On March 11 there were acts of violence like the burning of two ambulances. At that moment the Army had already burned some 13 dredges that, according to the government, were being used to finance the Clan del Golfo. But the miners insisted that the absence of any arrests showed the baseless persecution of their organization.
The situation, which is one more evidence of the country’s other structural problem, which is informal mining—which is not the same as artisanal mining—was taken over directly by President Petro. He stressed that “there’s going to be a line of control of all of the yellow equipment in Colombia, to track down and destroy everything that’s being used for illegal mining in the rivers of Colombia.” On March 12, the Commander of the Armed Forces, General Helder Fernán Giraldo, announced the arrival of a battalion to improve security conditions in this subregion of Antioquia, which had already had 11 days in a difficult situation of public order. The blockades and acts of violence persisted the next day while the minister insisted that the Clan del Golfo was behind the miners’ strike. We got to March 15 and the same official said that the blockading of roads in Bajo Cauca and Northeast Antioquia had been taken care of, and that the government was disposed to dialog with the miners.
And it was on that same day when the country learned of another tragedy, along with the others that were piling up, and there was indignation, but really, basically, it was just one more, because as a country we have not been able to put an end to those tragedies. The Cundinamarca firefighters and other first responders did the work of the rescue after the explosion of gas in six coal mines in Sutatausa. So far it’s known that 11 people were killed and 10 miners were trapped.
At the same time, it was the government itself that revealed the linchpins and some of the instruments it would use to achieve its objective of stimulating the energy transition in Colombia, like, for example, promoting tourism and favoring exploration, production, and industrialization of critical minerals like copper, cobalt, and lithium. The five linchpins are:
- Greater investments in clean energies and de-carbonization.
- Progressive substitution of the demand for fossil fuels.
- Greater energy efficiency.
- Revision and eventually making regulation more flexible in order to speed up generation of clean energy.
- Re-industrialization of the Colombian economy.
And, states the administration, “the speed of the energy transition depends on the results of these linchpins, so that they advance together with the transition of exports, with a more diversified economy, less dependent on coal and oil, and still with fiscal and macroeconomic sustainability.” The responsibility lies with the teams from the Ministries of Mining and Energy, Commerce, Industry and Tourism, Treasury and Public Credit. In the area of exports, for example, they are talking about agro-industry, manufacturing and intermediate products with more aggregate value.
The administration expects 5,440,000 tourists in 2023; and by 2026 it expects 7,500,000 nonresident visitors conservatively, and more optimistically, 12,000,000.
And what do others have to say, like the Treasury Minister? That “exploration and exploitation of liquid fuel and gas, stimulating self–sufficiency in the energy matrix,” will be maintained and emphasizing that there will work on exploration, production, and industrialization of the so-called “critical minerals.”
While we are looking at the macroeconomic reality, we learn from Sutatausa that the 10 that were trapped have been found and that there were 21 killed in all. In El Bagre, there have been 14 days of strike, while the Governor of Antioquia Department published videos that show the real condition of the streams. “Two weeks without illegal extraction of minerals have given nature a breather in Bajo Cauca. Like crystal, that’s how the Borrachera and Villa Chica streams in El Bagre look after the 14 days of the violent strike. “What do you think?” said Aníbal Gaviria. For that moment we knew that in all of 2022 in Colombia, 114 miners were killed, 17 of them who worked in Cundinamarca. In Sutatausa, the Mayor’s Office ordered 3 days of mourning. For now, and reviewing the statistics, “mining is the main economic source and source of jobs in this and other areas of the Department. For its part, Sutatausa has 27 mining titles in effect; however, the recent explosion that left 21 dead raises questions about the situation of this dangerous activity/”
The situation, wherever you look, deserves a good and extensive conversation. Not only for all of those who indeed have done well in the mining business and it sustainability, but also for all of those cases that describe with urgency the need to make some profound changes in this industry that’s so relevant for the country, because it’s not just an environmental or a day to day economic matter, but rather of the future of many Colombians with recurrent histories, that we all know about already, but we haven’t been able to find clear and feasible solutions. It’s not just the informal mining, with cases like Bajo Cauca; or deep shaft mining like in Cundinamarca, or in La Guajira, with all of the impacts that we have seen. And it’s not just issuing titles without measuring the impacts they create.
Coming into play is a fundamental role for the National Development Plan, which is now being debated, because it’s turning into a roadmap with clear objectives to attack. In this bulletin we have summarized several of those that we have experienced in recent months and we see that even though they seem to be isolated issues, they are all connected with the exploitation of natural resources, with the national economic base, and the future of all of us through climate change that is already in a crisis situation, without forgetting that coal continues to be, as the International Energy Agency (AIE) has said, the greatest source for generation of electricity.
[1] An environmental instrument is a technical document containing the information necessary to identify and evaluate environmental risks or impacts of the project.
[2] A gigawatt is one billion watts.