COLOMBIAN MINING IN A CHANGING DEVELOPMENT MODEL

• Jurisdiction: Derecho Internacional

International Mining and Oil & Gas Law, Development, and Investment
(Apr 2013)
CHAPTER 8B
COLOMBIAN MINING IN A CHANGING DEVELOPMENT MODEL
Claudia Jiménez Jaramillo
Executive Director, Large Scale Mining Sector
Bogotá

CLAUDIA JIMÉNEZ JARAMILLO is Executive Director of the Association for the Large-Scale Mining Sector - SMGE. Created in 2011, the association represents the 13 largest companies that explore for or exploit mineral resources in Colombia. SMGE contributes leadership to government, public opinion, and stakeholders to visualize that the mining sector is responsible with society, the environment, and the economy in Colombia. Claudia Jimenez served as Minister-Counselor to the President of the Republic in 2009-2010. She also served as Ambassador Extraordinary and Plenipotentiary of Colombia to the governments of Switzerland and Liechtenstein between 2006 and 2009; during the same government she was the Director of the Presidential Program of the Renewal of Public Administration (PRAP) of the National Planning Department and advisor on different occasions. She holds a Doctor in Law from the University of Paris II-Panthéon-Assas, and graduated with honors for her work entitled "Powers of preventive and punitive French independent administrative authorities and the Colombian Superintendency." She holds an International Diploma in Public Administration from the Ecole Nationale d'Administration (E.N.A.) France, as well as a Master Degree in Internal Public Law from the University of Paris II Pantheon Assas, with specialization in Administrative Law. She has been a professor of postgraduate students in law and economics, social security law, and transportation law at the University "Externado de Colombia" in Colombia. Among her awards is the "Order of Zurriago 2009," and she was also named "One of 10 Executives of the Year of the Junior Chamber International" in 2004.

International Mining and Oil & Gas

Rocky Mountain Mineral Law Foundation International Bar Association

"Colombian Mining in a Changing Development Model?"

Claudia Jiménez

Executive Director

Large Scale Mining Sector Association (LSMS)

April 2013

Large Scale Mining Sector Association (LSMS)

• Who are we?

♦ Non profit organization

♦ The LSMS groups the formal mining, demanding in environmental, social and industrial standards, dedicated to the exploration and exploitation of the mineral resources, which has significant levels of reserves and is responsible of much of the production and the mineral exports of the country.

♦ Companies associated: Anglo American, Anglogold Ashanti, AUX (EBX Group), Cerrejón, Colombia Natural Resources, Drummond, GranColombia Gold, Eco Oro Minerals Corp, Minas Paz del Rio, Mineros S.A., CCX (EBX Group) & Prodeco.

What we do?

♦ Acting as a interlocutor and represent the responsible large scale mining in front of the government, authorities and the media.

♦ Ensure the positioning and the sector competitiveness: public- private alliance to promote the agenda

♦ Unify the industry spokesperson of the LSMS

[Page 8B-2]

• Agenda

• 1. Optimism about the mining sector

• 2. 2012: economic weight of the mining sector and the public policy balance

• 3. 2013: complicated outlook

• 4. Challenges to achieve the growth expectations

• 5. Concluding remarks

[Page 8B-3]

The Colombian mining sector in the world

Although Colombia is ranked in the top 20 producers of coal, gold and nickel, its share in the World production is still not significant

Mineral	Production 2012	Share of World production1	World Ranking2	Latin America Ranking3
Coal	89,2 Mill Tn	1,4%	12	1
Nickel	52.000 Tn	2,48%	10	3
Gold	66,2 Tn	2,45%	15	5

Source: U.S. Geológical Survey, Ingeomines, Bloombero and Reuters

Cited in the Fedesarrollo study called "Impacto socioaconómico de la minería en Colombia", 2012 2013

• Mining investment dinamic

• Mining investment

• Latin America is the first destiny for the investors

[Page 8B-4]

Latin America is living an investment boom

Cesco estimates that the Latin American mining sector will receive investments of approximately US$ 250.000 millions to 2020

Argentina	US$ 10.000 mill
Brazil	US$ 58.000 mill
Chile	US$ 75.000 mill
Colombia	US$ 22.000 mill
Ecuador	US$ 7.000 mill
Mexico	US$ 13.000 mill
Panama	US$ 9.000 mill
Peru	US$ 56.000 mill
Total	US$ 250.000 mill

The reason of the General Royalties System reform:

Expectation of a boom in the mining and energy sector

There is a growing expectation about the creation of an income boom, caused by the expansion of the mining and energy activities

[Page 8B-5]

• Big expectations: engine for the National Development Program

• Agenda

• 1. Optimism about the mining sector

• 2. 2012: economic weight of the mining sector and the public policy balance

• 3. 2013: complicated outlook

• 4. Challenges to achieve the growth expectations

• 5. Concluding remarks

[Page 8B-6]

Behavior of the main economic indicators 2012

• GDP

• Exportations

• Foreign Direct Investment

• Employment

• Economic Linkages

• Royalties

[Page 8B-7]

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