Colombia expects to auction gold, coal and copper reserves for the first time next year to draw investment in energy and metals deposits stretching from the nation’s Pacific coast to the Amazon jungle.
Rights to explore for coltan, used in mobile phones, uranium and platinum won’t be part of next year’s auction, Mines and Energy Minister Mauricio Cardenas said yesterday in an interview in central Colombia.
“We’re not going to offer all of them at the same time,” he said. “We will just take the areas where we have the best geological information.”
Colombia aims to draw more spending from investors such as Brazilian billionaire Eike Batista with auctions that may lead to producing mines by 2020, Cardenas said. Investment in mining has lagged spending on oil production that helped push foreign direct investment in Colombia to a record $13.2 billion in 2011.
Next year’s auction will include areas where the government has more data on reserves, such as the Andean mountains, Cardenas said. Colombia hasn’t set the number of blocks it will offer.
Colombian President Juan Manuel Santos said this week that the government has put aside 20.5 million hectares (50.7 million acres) where new mining rights will be restricted to companies winning at auction.
There is less information available about potential mining reserves than for oil deposits, where auctions helped increase investment, said Gabriel Bayona, an analyst at Interbolsa SA, Colombia’s largest brokerage.
‘Lack of Knowledge’
“There’s a lack of knowledge about the areas,” Bayona said today by phone from Medellin. “The plan perhaps is too ambitious.”
Concern about global economic growth also may cool demand for new projects, he said.
Colombia will still award mining rights without auctions outside of the areas set aside by the government.
Colombia is the largest coal supplier in South America, exporting the fuel from mines owned by companies including Drummond Co., Anglo American Plc (AAL), Xstrata Plc (XTA) and BHP Billiton Plc. Companies already developing gold projects in Colombia include AngloGold Ashanti Ltd. (ANG) and Batista’s AUX Canada Acquisition Inc., which bought control of Ventana Gold Corp. last year to gain gold deposits in Colombia.
To contact the reporter on this story: Heather Walsh at email@example.com
To contact the editor responsible for this story: James Attwood at firstname.lastname@example.org