Colombia’s Readiness for the Mining Industry

by Lorenzo Morales

Political institutions tend to respond slowly in adapting to challenges. Longstanding problems typically arise and evolve long before policymakers and government officials are able to identify them. And when they do, they are generally ill-equipped to devise proposals to solving these problems. One of the more telling examples is happening in Colombia—where not only the mining industry is impacted but strategic assets like water are being put at risk.

Colombia is the largest coal producer in Latin America, and after Venezuela and Brazil, the third-largest for crude oil. The exploitation of gold, silver and rare earth minerals such as coltan (a combination of columbite and tantalite) is growing exponentially. Must of this activity is driven by foreign direct investment (FDI); between 2008 and 2009 alone, the percentage of investments in mining projects out of all FDI skyrocketed from 17 percent to 43 percent—from $1.8 billion to $3.1 billion. The figure is expected to further increase in 2010.

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