Mining to Colombia
Trends and opportunities
The current government, led by President Juan Manuel Santos has included mining in its economic development plan as a driver for the future of Colombia’s economy.
The Colombian extractive mineral industry is primarily characterised by coal, emeralds and gold.
The mining sector has identified eleven strategic minerals to aid the government’s exploration promotion program:
The mining sector currently contributes 2.4 per cent to Colombia’s growth domestic product (compared to Chile at 15 per cent), the government sees opportunities in the potential 80 per cent of territory dedicated to mine exploration which is completely unexplored.
Colombia was ranked the seventh best destination for mining investment in the world and the fourth in Latin America in 2012 according to the Behre Dolbear group. (Source: National Agency of Mining, Exploring Opportunities, May 2013).
Foreign investment in the Colombian mining sector registered an average annual growth rate of 27 per cent over the past ten years and totalled more than US$2.3 billion in 2012. Mining exports totalled US$12.5 billion in 2012 with an annual average growth rate of 24.6 per cent during the last decade (Source: National Agency of Mining, Exploring Opportunities, May 2013).
There have been no new major projects in Colombia in the past 15 years. Many large projects, especially in coal and gold, are now in in feasibility phase and are expected to start operating in the following four to seven years. This will increase market size and open new opportunities for Australian suppliers in different areas.
With the increased presence of formal and large scale mining operations in Colombia, the importance of community involvement in new exploration projects, with emphasis on prior consultation with indigenous communities will become increasingly relevant. Companies with this sort of expertise will be able to play a significant role in the development of the mining industry in Colombia in years to come.
Australia has innovative solutions and expertise operating in countries with demanding environmental and safety requirements, remote locations, where energy is expensive and water scarce, similar to the Colombian mining sector. Areas of opportunity are:
- Mineral exploration – geophysics, mapping, diamond drilling and tunnelling
- Mining software – resource estimation, modelling, mine design and planning, maintenance and optimisation
- Mining infrastructure
- Innovation and research and development
- Contract mining and engineering services
- Education and training for the industry
- Environmental related products and services – water and sewage treatment plants, effluents analysers and software
- Mine safety training and equipment due to new regulations
- Communities engagement consulting
- Land rehabilitation and mine closure.
Marketing your products and services
As of May 2015, there are fifteen Australian providers operating in the mining industry that have established an office in Colombia. Some have developed a presence through a subsidiary office, acquired a local company or developed a joint venture.
The right approach depends on factors such as the type of business that will be conducted in the market, available capital, existing contacts. Relationships are very important in Colombia and a local partner can provide valuable connections to the right decision makers.
Some tips to keep in mind:
- The mining industry in Colombia is not as mature as in other countries in the region and it is mainly driven by large multinationals that have been in the market for many years. Many of these have long-standing relations with suppliers at a global level and it may be difficult for new companies to be considered as potential providers.
- The market is heavily consulting-intensive and consulting firms have established a relationship and reputation with their clients. Making it difficult for consulting services from foreign companies with no track-record in Colombia to win new business opportunities.
- Setting-up increases the probability of commercial opportunities. Having a local presence is a key factor for many local companies.
- Given the focus on efficiency, productivity and cost reduction, it is critical to have a concrete value proposition that provides a clear benefit or differential from what is offered by competitors already in the market.
- It is helpful to mention if you have already done business with the mining company you are targeting in other parts of the world.
- It is useful to understand the Colombian mining industry, which has some very unique characteristics and needs.
- Do research on the mine and the company that operates the mine.
- If interested in visiting the mine sites while in the market, it is important to contact the main offices beforehand. Most of the mines are in remote locations, with difficult access and some might have special security protocols in place for foreign visitors.
- Consider participating in local industry conferences in Colombia. They are excellent ways to meet customers, build relationships and gather first-hand intelligence. Austrade manages the Australian presence at these events.
- Strong relationships and face-to-face contact is crucial when trying to win business in Colombia.
Links and industry contacts
Government, business and trade resources for Colombia
Agencia Nacional de Minería
Ministerio de Minas y Energía
Unidad de Planeación Minero-Energética
Sistema de Información Minero Colombiano
Asociación Colombiana de Minería
Revista Mundo Minero
Revista Pais Minero
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.
The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:
- develop international markets
- win productive foreign direct investment
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- strengthen Australia's tourism industry
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Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.
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A list of Austrade offices (in alphabetical order of country) is also available.