Colombia has great geological mining potential that provides huge opportunities for both local and foreign entities. The country’s diverse geological environments allow exploitation of a wide variety of minerals and metals. Based on such indicators such as income, exports, and royalties, Colombia’s mining industry is having a positive impact on its economy at national and regional levels.
To attract more investors in the country, the Colombian government issued a Mining Code (Law 685 of 2001), allowing business stability for foreign investments. For instance, the licensing was extended from the usual 5-year validity to a 45 to 50-year allowance, with sufficient scope for renewal. This change enables companies to profit significantly.
The mining sector has identified eleven strategic minerals which are of great economic interest:
Market Trends and Opportunities
Currently, the mining sector makes 2.4 percent of Colombia’s gross domestic product. 80 percent of the mining territory is unexplored, providing greater opportunities for investments.
According to the Behre Dolbear group, Colombia ranked 4th in Latin America and 7th in the world as the best destination for mining investments.
With the absence of major projects in the past fifteen years, many large mining projects are in feasibility phase and are expected to operate in the next four to seven years. As a result, there will be an increase in market size and new opportunities.
How to participate in the Colombian mining industry
The mining industry is a crucial one for Colombia. 1 million people are employed by this sector within the country.
Here are 3 ways in which one can participate in this booming market
This means to claim authority on any mineral, or any specific free area assigned to mining, as an individual or a company. Stalking involves certain general requirements on the part of the one doing the stalking and occurs on a first come, first, serve basis.
You may bid for any of the 11 strategic minerals, or any strategic mineral areas, as a company with specific capacity and experience. The public bidding process involves technical, economic and social environment requirements.
Negotiating an existing title
This is a situation in which the mineral rights can be transferred from one investor to another.
To increase your chance of succeeding there are certain factors that you should consider in your decision-making, such as business type, available capital, and existing contracts. You should also keep in mind that doing business in Colombia means establishing relationships. So it will help you a great deal if you establish rapport with local partners or do market research from which you can get valuable connections and advice.
Here are some other business tips:
- New companies may find it challenging to be considered as potential providers because of dominating multinationals that have been on the market for many years.
- It may be difficult for consulting companies from foreign companies with no track record in Colombia to win new business opportunities.
- Commercial opportunities are increased through setting-up. It is very important to establish a local presence.
- Understand the opportunities provided by competitors already in the market. Do this by having a concrete value proposition.
- Research the mines and the companies operating them.
- Before you visit mine sites, make sure that you contact main offices beforehand.
- Participate in local industry conferences in Colombia to meet customers, build relationships, and gather valuable information.