Updated 10:40 PM EST, Mon, Nov 23, 2020

Colombia Continues Work on Gold Projects Despite Dropping Prices

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Mining companies are still continuing their gold projects in Colombia despite the weakening local currency, which offsets falling gold prices.

Miners, including Continental Gold, Red Eagle Mining, and Mineros, are proceeding with their gold projects in the South American country, Business News Americas reported.

Colombia's peso has decreased in value by 70 percent against the U.S. dollar over the past 18 months, lowering costs for international miners, the news outlet wrote. These mining firms are facing gold prices that have plummeted 15 percent to US$1,100/oz over the past 12 months. Energy costs have also crashed for miners as crude oil prices fell to US$30/b this week, a 12-year low.

Mineros, Colombia's biggest gold miner, agreed on a new labor agreement with its unions, Business News Americas reported from Bogotá newspaper Portafolio. The firm has consented to a 5.7 percent wage increase, as well as a 1.4mn-peso ($430) bonus per worker that gives labor stability until 2017.

Red Eagle, which is based in Vancouver, Canada, started construction work in 2015 at its San Ramón underground mine worth $55 million in Antioquia, Colombia's longest-running gold projects, Business News Americas noted. San Ramón is set to come online in the second half of 2016.

Red Eagle is also developing Colombia's Vetas gold project, and is projected to produce 50,000oz/y at cash costs of Cdn$596/oz (US$417/oz) over an eight-year period at San Ramón, according to the company's website. San Ramón has reserves of 2.42Mt of 5.2g/t gold holding 405,000oz.

Other mining companies also in Colombia are Continental Gold's Buriticá gold-silver-zinc project in Antioquia, Atico Mining's El Roble gold mine in Choco department, Royal Road Minerals' La Golondrina gold mine in Nariño, AngloGold Ashanti's Gramalote and La Colosa deposits, Eco Oro Minerals' Angostura, and AUX Grupo's El Gigante, Business News Americas listed. Portafolio noted that currently, only Gramalote has secured an environmental license with a possible 2019 start-up date.

State mining agency ANM said that Colombia's gold output rose 7.7 percent to 519,472oz in the third quarter, Business News Americas noted.

Colombia's mining and energy sectors, together with the assistance of the Inter-American Development Bank, or IDB, recently announced that it will strengthen its policy decisions process and its management of information for efficient services, Finance Colombia reported. The sectors also plan to make improvements in its controls and audit methods.

IDB's loan will be worth $30 million and is designed to improve transparency and efficiency, Finance Colombia added. The Colombian government has identified transparency as the key for strengthening the capacities of its institutions. Serving as the principal beneficiary of the project is the MinMinas, the country's mining and energy ministry, and its related agencies.

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