The mining sector expects 15% growth in 2021

The Colombian Mining Association (ACM) presented the results of the activity in 2020 on Tuesday and announced its main challenges and economic perspectives. As a result, it projects double-digit growth for the current year.

 

According to the union, this recovery will advance according to the partial restoration of coal production, the reactivation of infrastructure and construction projects; the increase in international demand for luxury goods and the promotion of new gold projects in different areas of the country.

 

"It is time to project ourselves as a mining nation, we must promote the development of new operations that allow us to transform our potential into a geological and business reality," said Juan Camilo Nariño, President of the ACM; who in turn highlighted the contributions made by the sector in recent years.

 

According to studies by the Association, mining is the industry that makes the most contributions in proportion to its size in the economy, for every 1,000 pesos it generates in added value, it contributes 8 to social investment projects, a considerable difference when compared to the sector (financial (0.7), industrial (0.8), services (1.3),   agribusiness and food (2.9) and Hydrocarbons (6.5). In this way, the final figure of these investments amounted to almost 152 billion pesos only in 2019 .

 

Challenges of mining

 

"Although the forecasts are positive for the recovery, it will be essential that the government, institutions and mining companies articulate their efforts to achieve the goals," said Nariño. In this sense, he concluded that the main challenges of the sector are:   To promote an exploration policy that allows attracting greater investments for future operations. Build a regulatory framework for the competitiveness of national coal, which makes it possible to recover the production levels of previous years and which is aimed at conquering new markets, mainly Asia.

 

On the other hand, he stressed that it is necessary to support the development of new mining projects and existing ones; 2020 was an important year for the production of emeralds and metallic minerals, gold reported its best performance since 2017 and the growing global demand for copper presents itself as another great opportunity for the industry.

 

Regarding the production of metallurgical coke and coal, the executive highlighted that although demand worldwide was affected by the pandemic, the reactivation occurred quickly and its exports reacted throughout the year with what foreign sales of coke increased 7%. This is how Colombian coke continues to consolidate itself as the third main export market in the world, after China and Poland, where, according to 2019 figures, it contributed 11% of world external sales.

 

Another challenge is to promote the mining of construction materials, protecting national production and increasing reserves for the construction of new infrastructures. According to union figures for each job in mining, 600 jobs are generated in production and marketing in this sector.

 

Finally, the industry should strive for a tax reform that does not affect the competitiveness of the sector, “mining will be essential for Colombia's economic recovery and it needs the next regulations to guarantee better conditions, in a key year for the diversification of the basket. mining ”,   Nariño pointed out.

 

Mining behavior in 2020

 

Mining activity in the country was not immune to the impacts generated by Covid. According to the balance provided by the ACM, the sector's GDP registered its largest historical fall as a result, among others, of a significant reduction in coal production, stagnation in activities related to construction; the drop in world demand for precious stones and a 49% decrease in foreign direct investment (FDI), according to data from the Banco de la República. These circumstances reduced the royalty contributions that the industry generates annually by about one trillion pesos. In contrast, there was a 3% increase in exports.

 

“Despite a challenging 2020, we continue to move forward as an increasingly attractive country for its metallic minerals and this is essential to support the energy transition. The greener world that we all want and that we are conceiving needs more mining, that is why together we must continue working to maximize its potential ”, concluded Nariño.