Colombia
a Good Deal for Mining
and Energy Investors
We have what the world needs
Carlos Rodado Noriega
Minister of Mines and Energy
Seoul , August 12, 2011
Content
1. Colombia: An Upcoming Emerging Market
2. Why you should invest in Colombia
3. Sustainable Mining in Colombia
4. Opportunities for Cooperation
-2-
1. An Upcoming Emerging Market
Some key facts about Colombia
Total Area: 1.141.748 Km2
Population: 45.657.937
Government: Democracy
GDP: 307 billion USD
Source: EIU
1. An Upcoming Emerging Market
• COLOMBIA the C on the
CIVETS
COLOMBIA INDONESIA VIETNAM
EGYPT
TURKEY
SOUTH AFRICA
1. An Upcoming Emerging Market
“The new BRICs are Colombia, Indonesia,
Vietnam, Egypt, Turkey and South Africa
(CIVETS). They are countries with major
populations, dynamic, diverse economies,
political stability and each of them has a
brilliant future.”
Michael Geoghegan, CEO HSBC
April 26, 2010 in his speech to AmCham Hong Kong
“Whether on security, democratic stability, or
vibrancy, the strength of Colombia’s
democracy is there for all to see”
Eric Farnsworth, vice president of the Council of the Americas.
Content
1. Colombia: An Upcoming Emerging Market
2. Why you should invest in Colombia
3. Sustainable Mining in Colombia
4. Opportunities for Cooperation
-6-
Why you should invest in Colombia?
1. Mineral and Hydrocarbons
Potential
2. Economic Stability
3. Political and Legal Stability
4. Healthy Business
Environment
5. Improved Security
1. Mineral
Potential
5. Improved
Security
2. Economic
Stability
4. Healthy
Business
Environment
3. Political
and Legal
Stability
2. Why you should invest in Colombia?
1. MINERAL POTENTIAL
1. Mineral Potential
5. Improved Security
2.Economic
Stability
4. Healthy Business
Environment
3. Political Stability
We come from a mining
tradition even before pre
Hispanic times. However,
Colombia has not fully
developed its mining
potential yet.
Why you should invest in Colombia?
1. Mineral Potential
5. Improved Security
2.Economic
Stability
4. Healthy Business
Environment
3. Political Stability
The basis of our potential
RESOURCES
POTENTIAL
Oil
2.5 – 40 MMB
Gas
4.3 – 8.5 TCF
Hydroelectricity
90 GW
Coal
7,063 – 16,992 MMT
46% of LAC reserves
2. Why you should invest in Colombia?
Mining a Driving Force
• Our Government has identified this
potential and determined to make the
mining industry, one of the key driver
of economic growth by establishing a
solid institutional framework
• Private investment is crucial for the
development of this potential
• Hence, I would like to show you why
you should be part of this beneficial
process
2. Why you should invest in Colombia?
1. MINERAL POTENTIAL
1. Mineral Potential
2.Economic
5. Improved Security
Stability
4. Healthy Business
Environment
3. Political Stability
Variety of Minerals
throughout an
unexplored territory
Key:
Coal
Gold
Emeralds
Nickel
Source: Ingeominas
Why you should invest in Colombia?
1. MINERAL POTENTIAL
1. Mineral Potential
5. Improved Security
2.Economic
Stability
4. Healthy Business
Environment
Geological Coverage
3. Political Stability
51%
Colombia still has 49%
mineral potential to be
discovered
49%
Source: Ingeominas
2. Why you should invest in Colombia?
1. MINERAL POTENTIAL
1. Mineral
Potential
5. Improved
Security
4. Healthy
Business
Environment
2.Economic
Stability
3. Political
Stability
Coal: Colombia is a Key player in the world and owns the biggest
reserves in Latin America
Cerrejon
La Loma
El Descanso
Calenturitas
Paz del
Río
Source: Ingeominas
Production
74.4 MTn (2010)
Reserves proven
7,062 MTn
Reserves
Potential
17,800 MTn
Ranking
4th exporter and 10th
producer in the world
Characteristics
Thermal coal: 88%
Metallurgic coal: 12%
Heating power
10,000 - 12,000 BTU
•Large scale mining projects are located on
the northern Caribbean Region and they
extract thermal coal.
•Small scale mining is concentrated in the
Andean Region and extracts metallurgic coal.
Why you should invest in Colombia?
1. MINERAL POTENTIAL
1. Mineral
Potential
5. Improved
Security
2.Economic
Stability
4. Healthy
Business
Environment
Gold: Significant inferred potential
3. Political
Stability
Gramalote
Titiribí
La Bodega
Angostura
Production
53 Tn (2010)
Reserves
40.98 Million Oz.
Characteristics
Production comes from
alluvial extraction mainly.
La Colosa
•Major underground projects are still
under the exploration stage. These are
located mainly in Santander, Antioquia
and Caldas and Tolima.
Source: Ingeominas
2. Why you should invest in Colombia?
1. MINERAL POTENTIAL
1. Mineral
Potential
5. Improved
Security
4. Healthy
Business
Environment
2.Economic
Stability
Nickel: Significant inferred potential
3. Political
Stability
Production
109 MLb (2010)
Reserves
1.6 million tons
Ranking
9th producer in the world
Characteristics
Production is concentrated in
Cerromatoso, in Cordoba,
managed by BHP Billiton
Cerromatoso
•Cerromatoso is the world’s secondlargest producer of ferronickel and
boasts some of the lowest costs.
Source: Ingeominas
2. Why you should invest in Colombia?
1. MINERAL POTENTIAL
1. Mineral
Potential
5. Improved
Security
4. Healthy
Business
Environment
2.Economic
Stability
Emeralds : Significant inferred potential
3. Political
Stability
La Pita
Source: Ingeominas
Production
5.2 Million carats (2010)
Ranking
First producer in the world,
57% of total production
Characteristics
Best quality and appearance
2. Why you should invest in Colombia?
1. HYDROCARBONS POTENTIAL
1. Mineral
Potential
5. Improved
Security
4. Healthy
Business
Environment
2.Economic
Stability
Colombia, a country with hydrocarbon potential
3. Political
Stability
Total 54,681 MEPB
Source: ANH, Nuevos aportes a la estimación del potencial de hidrocarburos en Colombia (2009).
2. Why you should invest in Colombia?
In order to guarantee the
supply of fuels and electric
power, Colombia’s goal for the
next 3 years is to sign 205 new
oil exploration and production
contracts, including contracts
for non conventional
hydrocarbon…
To drill 570 new A3
exploratory wells…
Source: MME – ANH
* Number of wells with the current contract commitments, it can vary when new contracts get signed.
2. Why you should invest in Colombia?
In order to reach an average production of 1.150 KBPD of crude oil
(December 2014)…
Forecast of Audited Crude Production 2011 – 2014
(Thousand of Barrels per Day – Kbpd)
Source: MME
Total production Jul 30 2011 of 930 Kbpd
And an average production of 1.350 MPCD
of natural gas in December 2014
Forecasted of Tradable Gas Production 2011 – 2014
(Millions of Cubic Feet per day – MCF/D)
Source: MME
2. Why you should invest in Colombia?
1. Potential Mineral
2. Economic Stability
2.Economic
5. Improved Security
Stability
4. Healthy Business Environment
3. Political Stability
“There are
significant
reasons to
invest in
Colombia”
2. Why you should invest in Colombia?
1. Potential Mineral
5. Improved Security
2.Economic
Stability
2. Economic
Stability
Sound Economy
4. Healthy Business
Environment
3. Political Stability
• Colombia has a tradition of
macroeconomic stability
• During the 1980s, in contrast with
other Latin American countries, it
honored its external debt.
• Never experienced hyperinflation
2. Why you should invest in Colombia?
2. Economic Stability
1. Potential Mineral
2.Economic
Stability
4. Healthy Business
Environment
3. Political Stability
Percentage growth (constant prices)
10
Asian
Crisis
World
Crisis
8
6
4
2
0
-2
-4
-6
-8
-10
Source: DANE
Colombian GDP is characterized for its stability
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010*
5. Improved Security
Why you should invest in Colombia?
1. Potential Mineral
2. Economic Stability
2.Economic
5. Improved Security
Stability
Faced Economic Crisis with Success
4. Healthy Business
Environment
3. Political Stability
8%
7%
6%
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
6,8%
5,7%
4,6%
3,1%
4,3%
2,2%
1,6%
2,5%
1,9%
7,5%
4,7%
3,8%
2,6%
3,3%
3,8%
3,8%
4,3%
3,3%
2,5%
1,6%
0,4%
-2,1%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Colombia
Rest of the World
• Colombia has faced the international economic crisis with great success, reporting positive growth
rates throughout the decade.
Graph: Proexport, Source: DANE (National Accounts), EIU (Market Indicators & Forecasts)
Note: * EIU forecast to the World and Latin Focus to Colombia
Why you should invest in Colombia?
1. Potential Mineral
5. Improved Security
2.Economic
Stability
2. Economic Stability
Annual FDI net inflows have increased significantly
4. Healthy Business
Environment
3. Political Stability
Foreign Direct Investment, Total in Mines and Energy
Source: Banco de la República
2. Why you should invest in Colombia?
1. Potential Mineral
5. Improved Security
2.Economic
Stability
4. Healthy Business
Environment
3. Political Stability
2. Economic Stability
2. Why you should invest in Colombia?
1. Potential Mineral
5. Improved Security
2.Economic
Stability
4. Healthy Business
Environment
3. Political Stability
“There are
significant
reasons to
invest in
Colombia”
3. Political Stability
2. Why you should invest in Colombia?
1. Potential Mineral
5. Improved Security
2.Economic
3. Political and Legal Stability
Stability
4. Healthy Business
Environment
3. Political Stability
• Oldest democracy in Latin America
• A sound protection of property rights is
a well known colombian tradition
• Our people welcomes foreign investors
Why you should invest in Colombia?
1. Potential Mineral
5. Improved Security
4. Healthy Business Environment
2.Economic
Stability
4. Healthy Business Environment
3. Political Stability
“There are
significant
reasons to
invest in
Colombia”
Why you should invest in Colombia?
1. Potential Mineral
5. Improved Security
4. Healthy Business Environment
2.Economic
Stability
4. Healthy Business Environment
3. Political Stability
• International institutions and
magazines recognize Colombia as
one of the main investment
destinations
• Colombia has shown a notable
improvement both in business
quantitative and qualitative
rakings
2. Why you should invest in Colombia?
4. Healthy Business Environment
1. Potential Mineral
5. Improved Security
2.Economic
Stability
4. Healthy Business
Environment
3. Political Stability
International media recognizes the transformation
Colombia is experiencing
2. Why you should invest in Colombia?
1. Potential Mineral
5. Improved Security
2.Economic
4. Healthy Business Environment
Stability
4. Healthy Business
Environment
3. Political Stability
Doing Business Ranking Variation, 2007-2011*
(Change in positions)
Business friendly country
LatinAmerica
Ranking
Country
Mexico
Peru
Colombia
Chile
Panama
Argentina
Costa Rica
35
36
39
43
72
115
125
Brazil
127
130
172
35
36
Ecuador
Venezuela
Mexico
Peru
Source: Top Reformers Report, World Bank
*Positive figures show improvements in business environment
Why you should invest in Colombia?
4. Healthy Business Environment
1. Potential Mineral
2.Economic
5. Improved Security
Stability
4. Healthy Business
Environment
Colombia ranked among the top countries on investor protection
3. Political Stability
Strength of Investor Protection, 2011
8,3
Colombia
6,7
Peru
6,3
Chile
6,0
Mexico
5,3
Brazil
Panama
4,7
Argentina
4,7
2,3
Venezuela
0
2
4
6
Rating
8
World
Ranking
Country
5
Colombia
20
Peru
28
Chile
44
Mexico
74
Brazil
109
Argentina
109
Panama
179
Venezuela
10
Ranking made up by 183 countries
Source: Doing Business, 2011 (World Bank)
Why you should invest in Colombia?
4. Healthy Business Environment
1. Potential Mineral
5. Improved Security
2.Economic
Stability
4. Healthy Business Environment
3. Political Stability
The Mineral Sector
• All that is required to participate in the
mineral activity is legal representation
and an address in Colombia
• The Mining Act sets the same rules and
standards for foreign investors as it does
for domestic ones
• Mining licenses can be bought and sold
by investors
2. Why you should invest in Colombia?
1. Potential Mineral
5. Improved Security
2.Economic
Stability
4. Healthy Business
Environment
5. Improved Security
3. Political Stability
“There are
significant reasons
to invest in
Colombia”
2. Why you should invest in Colombia?
1. Potential Mineral
5. Improved Security
2.Economic
5. Improved Security
Stability
4. Healthy Business
Environment
Security improvements in recent years have also benefited the
mineral sector by reducing attacks on industry infrastructure,
attracting greater investments.
3. Political Stability
Number of events
600
500
400
300
200
100
2000
Source: Ministry of Defense
2001
2002
2003
2004
2005
2006
2007
2008
2009
Attacks to oil pipes
Attacks to energy infrastructure
Attacks to bridges
Attacks to roads
2010
2. Why you should invest in Colombia?
1. Potential Mineral
Kidnapping
4,000
3,500
5. Improved Security
2.Economic
5. Improved Security
Stability
3,000
2,500
2,000
4. Healthy Business
Environment
3. Political Stability
1,500
1,000
500
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Kidnnaping
Extorsive Kidnnaping
1.575
1.436
Attacks Against Infraestructure
350
300
928
712
250
673
567
652
200
580
150
412
100
19
50
0
2002
2003
2004
2005
2006
Source: Ministry of Defense
2007
2008
2009
2010
Ene/2011
2002
2003
2004
Pipelines Blowup
2005
2006
2007
2008
Bridges Blowup
2009
2010
Roads Blowup
2. Why you should invest in Colombia?
1. Potential
Mineral
5. Improved
Security
4. Healthy
Business
Environment
2.Economic
Stability
3. Political
Stability
All of the above
facts have
brought about a
growing interest
in Colombia
2. Why you should invest in Colombia?
Mining titles have increased more than 150% since 2002
8886
9000
8126
8000
7343
7000
6000
6043
5816
5691
2005
2006
5067
5000
4000
3000
3649
2965
2000
1000
0
2002
2003
2004
Source: Sistema Información Minero Colombiano and INGEOMINAS
2007
2008
2009
2010
39
2. Why you should invest in Colombia?
Important mining players trust Colombia
Project
Location
Ownership
Mineral
Prod per year
Cerrejón
La Guajira
BHP Billinton, Xtrata,
Anglo American
Coal
32 Million tons
La Loma
Cesar
Drummond
Coal
22.9 Million tons
El Descanso
Cesar
Drummond
Coal
3 Million tons
CMU Tesoro
Jagua
Cesar
Glencore
Coal
4.4 Millon tons
Cerromatoso
Córdoba
BHP Billinton
Ferronickel
109 Million Lbs.
El Bagre
Antioquia
Mineros S.A.
Gold (alluvion)
80,000 Oz
Lower Marmato
Caldas
Mineros Nacionales
Gold (vein)
30,000 Oz
Paz del Río
Boyaca
Votorantim
Iron ore
624,000 Tons
Source: Distritos Mineros, MME
Content
1. Colombia: An Upcoming Emerging Market
2. Why you should invest in Colombia
3. Sustainable Mining in Colombia
4. Opportunities for Cooperation
- 41 -
3. Sustainable Mining in Colombia
Environmental and Social Commitment: Our reality
• Colombia is blessed with both mineral and
environmental richness.
• The mineral sector is fundamental to Colombia´s
prosperity, therefore an important challenge for
our country is to manage and reduce any
tensions between the two.
3. Sustainable Mining in Colombia
Environmental and Social Commitment: Our reality
3. Sustainable Mining in Colombia
Number of threatened species
3. Sustainable Mining in Colombia
Volumen 6
Familia
Orchidaceae
Total CR
375 6
EN VU
64 137
Total 207
Colombia owns 4010 orchid species
(distribuited in 260 genus)
207 : Threatened
Source: Sistema de Información sobre
Biodiversidad de Colombia
Año: 2007
3. Sustainable Mining in Colombia
Familia
Total
Lauraceae (30)
55
Volumen 4Lecythidaceae
(27)
43
Sapotaceae (27) 40
Fabaceae (24)
53
Burceraceae
(21)
40
Caesalpinaceae
(21)
39
Magnoliaceae
(17)
Meliaceae (15)
Euphorbiaceae
(13)
38
Mimosaceae
(13)
32
Año: 2007
Total (208)
340
3. Sustainable Mining in Colombia
For all of the above reasons, mining
in Colombia has to be environmental
and socially sustainable, applying
the best practices
Content
1. Colombia: An Upcoming Emerging Market
2. Why you should invest in Colombia
3. Sustainable Mining in Colombia
4. Opportunities for Cooperation
- 48 -
Colombia - Korea
Opportunities
for Cooperation
Given the above, there are opportunities for
Korean Participation in Hydrocarbons E&P
We would like to
increase Korean
presence in
Colombia:
Participation of Korean
companies in developing
non conventional
hydrocarbons
Shale Oil
Tight gas
Coal bed Methane
Cooperation Agreements
regarding fuels and biofuels
Activities:
1. Technology and information exchange in regard to fuel quality management.
2. Periodic exchange of information and experiences.
3. Expert exchanges and mutual visits.
4. Joint research in the field of hydrocarbons and fuels.
5. Cooperation for the purpose of training experts in the field of hydrocarbon
energy.
6. Among others.
Cooperation Opportunities in Minerals
• Coal potential
• Coal supply for Korean imports
• Joint exploration of minerals in
Colombian territory
• Maritime Exploration of Minerals:
regulation
Cooperation Opportunities in Energy
• Joint ventures for developing large scale wind
energy at competitive costs and small scale for
non interconnected zones in Colombia
• Cooperation in regard to public lighting
technologies and practices based in the use of
LEDs
• Support with norms and regulation to
implement this technology in Colombia
Colombia is an excellent destination for
mining investors!
We invite you all not to miss this
opportunity
Thank You!
Carlos Rodado Noriega
Minister of Mines and Energy
COLOMBIA
www.minminas.gov.co