Ibagué bans mining

Colombian regions continue to ban the development of mining activities in their territories; this time it was Ibagué, Capital of the department of Tolima.

Ibagué was the first capital city to ban large-scale mining projects after its Mayor, Guillermo Alfonso Jaramillo, proposed this initiative to the city council and it was approved in a second debate.

Jaramillo emphasized that this decision is in defense of the ecosystem because it prohibits mining projects at a medium and large scale.

According to Camilo Delgado, member of the Liberal Party, artisanal mining and extraction of minerals from flowing water are not affected by this measure. (HCC: In this way, local politicians unfortunately also preserve illegal mining.)

"It is a measure to preserve and defend the ecological and environmental heritage of the municipality," Delgado said. (HCC: Even though there are no environmental controls on artisanal mining and it typically uses banned chemicals such as mercury.)

Minister of Finance Mauricio Cárdenas rejected Ibagué’s decision, and said that minorities cannot decide on the welfare of the majority of citizens since this type of action affects investments in Colombia.

"I disagree that a municipal council prohibits to develop X or Y project in the region. This should not be the work of a minority but it should be something more broadly based", emphasized Cardenas.

Bottom-line: Time passes and regions intending to do an anti-oil and mining referendum continue to grow, while the industry is still waiting for the "famous" bill to regulate this mechanism.

In statements to the press by local politicians, we hear anger about projects being imposed by Bogotá without adequate compensation.

Funny how MinFinance Cárdenas did not mention his contribution to the reform of royalty distribution which, if it has not caused the backlash against extractive industries, has certainly contributed to the anger.

Tolima, the department of which Ibagué is the capital, produced 16.5mbdof crude oil in 1Q17and 6mmcfdof gas in 3Q16 (the last available data from the ANH.)

Both sectors have been on long-term decline in the region but recently, principal producer Ecopetrol (NYSE:EC) transferred a number of mature fields to subsidiary Hocol in the hopes of reviving them.

With the capital city voting against the extractive industry, will other communities follow suit? Will the governor decide there are short-term votes to be gained by banning it in the department as a whole?

Having been woken up (we thought) by Cajamarca, MinMinas should have been focused on this potential threat. It obviously botched the assignment.

This adds to the string of losses in popular – perhaps populist – actions against the extractive industry, and makes us doubt the ‘everything under control’ and ‘we now have an open dialogue with communities’ stories coming out of the National Hydrocarbons Agency (ANH) and MinMinas.

Tags: colombia, ibagué, mining, mining projects
Posted in LatAm, Commodities, Commodities