Colombia – a key South American player

Materials World magazine
,
1 Aug 2017

Michael Schwartz examines the mining industry of one of the world’s top coal exporters, which boasts significant copper-gold deposits, too. 

Colombia is now accepted as a safer country following the peace accord with FARC (Revolutionary Armed Forces of Colombia), which brought an end to a long-lasting civil war.

The minerals that can be surveyed are formed of, among others, base and precious metals such as kimberlites, hydrocarbons, uranium and rare earths. In turn, geophysical surveys can help with mine planning and construction that requires accuracy to more than 20cm in elevation – calculating volumes shifted can also be accomplished.

The country is an important player in the international coal sector. According to the coal production figures from BP’s Statistical Review of World Energy, the global total for coal mined in 2015 was 7.861Blnt (down from 8.164Blnt for 2014). While the top individual producer for 2015 was China (3.747Blnt, down from 3.874Blnt for 2014), Colombia comes in 11th for both 2015 and 2014, at 85.5Mt and 88.6Mt, respectively. However, despite the end of the civil war, the mining sector contracted by 6.5% in 2016 according to government statistics.

Totals for coal exports by individual countries are telling and bear out the finding that relatively little coal is exported. The World’s Top Exports website, as of 19 May 2017, shows China in 11th place, contributing US$700 million or 0.9% of global coal exports. 

It is here that Colombia comes into its own. The US$4.4Bln-worth exported puts Colombia in joint fourth place with the USA (5.9%). This is above South Africa and Canada in sixth and seventh place, respectively, and makes Colombia the largest coal reserve in Latin America.

El Cerrejón

A key Colombian mining site is El Cerrejón, where coal resources have been estimated at 1.961Blnt. Located in La Guajira province in northern Colombia and comprising seven active pits, Cerrejón incorporates not only the actual production of coal but also mining equipment maintenance and support services, as well as a 150km railway and an independently-run port, Puerto Bolivar, located on the Caribbean coast.

At its bluntest, Cerrejón is the world’s largest opencast coal site and is large enough to join the World Coal Association in its own right. Its sheer area covers 69,000ha, whereas its operative area including camp and mining area covers 13,000ha. Its annual production will have topped 32.4Mt by the end of 2017.

Cerrejón is independently operated, but belongs in three equal parts to subsidiaries of BHP Billiton, Anglo American and Glencore. Cerrejón is an exclusively open-pit mine – coal production began in the early 1980s and the operation's concession/lease is in place until 2033. Total production from the site is over 32Mt/y. The 240 trucks used to collect the coal from the mine are among the largest of their type, with capacities ranging from 190–320t.

After levelling, wetting and compacting to prevent dust emissions, coal is transported in 96–110t trucks via a 150-mile railway, linking the mine to Puerto Bolívar, where ships of up to 180,000t deadweight are able to receive the coal. To accomplish its objectives, the company employs over 12,000 staff (including contractors), of whom only 1% are not Colombians. Once again, Cerrejón’s significance in Colombia’s economy is obvious.

A representative of CMC, Cerrejón’s marketing company, confirmed to Materials World that the mine’s thermal steam coal, primarily used in power stations, is ‘derived from a blend of seams to meet contractual/end-burner specifications. The coal is mainly an unwashed product that is crushed with typical calorific values of 10,600Btu/lb GAR up to 11,300Btu/lb GAR. All coal produced by Cerrejón is for export and is consumed globally.’

With the sheer amount of coal available and the fact that it is entirely for export, Cerrejón is very clearly a major force behind Colombia’s successful programme of coal exporting. The company also has a recognised approach to sustainability, including integrated water management, more than 3,600ha of rehabilitated land and ongoing work with communities.

Atico Mining

Coal should not be allowed to overshadow Colombia’s other mineral wealth. Canadian-based Atico Mining is involved with Latin American copper-gold projects, with a strategy to become a mid-tier copper-gold producer through acquiring those advanced-stage projects that offer high-margin operations and sustainable organic growth.

Another key Colombian project is the El Roble mine, located over 6,679ha at Carmen de Atrato, western Colombia. This mine is situated on the side of a mountain with adits every 200m and has processed around 1.8Mt of copper-gold ore over the past 22 years, while Atico Mining’s recent exploration below current seams has identified a measured and indicated resource of 1.86Mt grading 3.46% copper and 2.27g/t gold.

This total has in turn been enhanced by the announcement on 22 June this year of a copper-rich massive sulphide surface exposure just north of the existing mine. Three samples in particular show copper percentages of 7.168 over 1.2m, 12.468 over 1.1m, and 9.472 over 1m.

Present production rates at El Roble are reaching 800t/d throughput. Igor Dutina, Atico Mining’s investor relations manager, pointed out to Materials World that El Roble’s 22-year life was being extended past its current seven-year life, the mine being grown by Atico Mining as it comes – ie, as discoveries enable new operations to come on track. It is in the large unexplored areas around El Roble that its future lies.

AngloGold Ashanti Colombia

AngloGold Ashanti owns a geographically diverse portfolio of gold operations and projects in Colombia via its subsidiary AngloGold Ashanti Colombia (AGAC). The company began actively exploring in Colombia in 2002. To date, in excess of US$255 million has been invested in various greenfield exploration projects in the country.

Chris Nthite, VP Group Communications Strategy & Business Development, told Materials World, ‘Colombia remains an area of long-term focus for AngloGold Ashanti, particularly given its attractive and under-explored geological potential. AngloGold Ashanti, through AGAC, has been in Colombia for more than a decade and the company has three major prospects – Gramalote, Quebradona and La Colosa. These projects are currently undergoing various studies prior to decisions being made over their future development.’

More specifically, the three sites, all advanced greenfield projects in the west of the country are –

  • La Colosa (100% owned). Here, infrastructure drilling and economic studies continue now that area adjustments allowing new platforms have been successfully completed. AGAC has secured district-scale opportunities surrounding La Colosa and is continuing with regional targeting of gold-rich porphyry mineralisation. Basic concept is a large open-pit operation.
  • Quebradona (7.28% owned by B2Gold) within which Nuevo Chaquiro is a significant new copper-gold porphyry-style mineralised system. B2Gold is not participating in the exploration expenditure and its interest in the project is being diluted. Quebradona lies in the Middle Cáuca region of Colombia, 60km southwest of Medellin. Nuevo Chaquiro is one of five known porphyry centres within the property – all five were integrated into one property during 2016, totalling 7.593ha. Following on from Quebradona’s conceptual study, mining will be by sub-level caving with ore access being by both an upper and a lower access tunnel. The expected mining rate will be 5Mt/y ore.
  • Gramalote (49% owned by B2Gold) where there has been a longstanding history of artisanal mining. Here, AGAC is currently solely responsible for the management of the project – a preliminary feasibility study is now underway with a completion date this September.

Total combined resources from these mines total 38Moz, with 26Moz indicated and 12Moz inferred. G/t grades are 0.79g/t where measured, 0.80g/t indicated and 0.42g/t inferred. Regarding these figures, Nthite explained, ‘Grade is only one factor in determining the economic viability of a mine – there are a host of others including metallurgical recovery rates, currency and fuel price assumptions, tax rates, equipment costs, mining costs, among others.’

Other projects

Naturally, there are many other mining projects in Colombia. Toronto-listed EcoOro is both an exploration company and a mine developer. Since 1994, it has been focusing on its 100%-owned Angostura underground gold-silver resource situated in northeastern Colombia. Angostura lies 400km northeast of Bogotá.

MI43-101 statistics show a measured and indicated resource of 2.21Moz at 4.57g/t and an additional inferred resource of 1.03Moz gold at 4.7g/t, the cut-off grade being 2.5g/t. Drilling results total 350,000m and underground development has reached 3,000m.

For EcoOro, its underground operation generates a substantially smaller surface footprint than an opencast mine. In addition, Angostura is accessible year-round by helicopter or road from the city of Bucaramanga at elevations ranging from 2,400m to 3,500m above sea level, and incorporates its own power grid.

There are also numerous satellite prospects yet to be advanced – Móngora, La Plata, Agua Limpia, Armenia and Violetal. Including Angostura, EcoOro has concessions, exploration licences and exploitation permit areas covering an area of approximately 30,000ha in the Departments of Santander and Norte de Santander within the Vetas-California gold district, a highly prospective area rich in mineral deposits. However, only about 10% of the concessions, licences and permit areas have been explored.

Colombia is clearly a key player in the global coal sector. This success should not overshadow the potential that exists in the country for gold and many other minerals.