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Mining investments pick up

By Manuel Rueda, Editorial Director

Tuesday, April 06, 2010

Mining deals are picking up in Colombia with 8 significant mergers and acquisitions so far this year by companies from Canada, the UK, Brazil, and Hong Kong.

Much of the action is taking place in the booming coal sector and right before the easter holiday, London Mining announced it will buy 80% of the shares of Colombian International Coal Company (ICC) it did not yet own, thus taking over 100% of the company.

ICC  runs a coal mine in the municipality of Coque in the State of Boyaca and London Mining plans to invest 40 million dollars to expand the mine, which is expected to produce up to 400 kilotons of coal in the next 12 months.

Analysts say that Colombia has received 1.5 billion dollars worth of foreign investment in the past 12 months, including the highest three month period since 2007, and although specific figures for the mining sector are not available, it is thought that it accounts for much of the rise in foreign investment.

Brazilian company MPX, which also works on the coal sector, announced this month that it will invest 1.8 billion dollars over the next ten years to develop several mining concessions in northern Colombia as well as a new port on the Caribbean coast.

Colombia is the fifth largest coal exporter in the world, and its Caribbean coastline makes the country easily accessible to markets in Europe and the US.

But the country is also an interesting destination for gold mining companies which are developing new projects in several parts of the country.

Brazilian tycoon Eike Batista, the world’s eight richest man, recently announced the creation of a company called AUX that will exploit gold in Colombia and other countries in the region.

Batista is already a big stockholder in Ventana Gold, a company that is conducting gold explorations in the municipality of California in the State of Santander, a location that is through to have Colombia’s greatest reserves.

Gold exploration is also picking up in southern State of Bolivar where Hong Kong firm Orofino Gold recently announced it has purchased two mines that will form part of a project called “Sendero de Oro” or Golden Path.

Onsino Capital Corporation has announced it will purchase Quia resources, a local company that is currently conducting exploration and mining for gold in the Serrania de San Lucas, a remote mountain range that is also located in southern Bolivar.

 

One of Colombia’s most treasured mineral resources are emeralds and economists are also reporting significant moves in this sector.

Earlier this month, Canadian firm Indicator Minerals signed a deal to acquire Rio Verde Enterprises, another Canadian firm that runs emerald mines in the State of Boyaca.