Raw Materials

Colombia has important deposits of the following natural resources: Petroleum, Nickel, Gold, Natural Gas, Iron ore, Silver, Coal, platinum, Emeralds.

In order to be able to exploit or mine Colombian fossil and mineral natural resources, a national concession is required. Generally the control of prospectors is assumed by INGEOMINAS. In order to obtain the searching and production rights, a fee of about 70% of the extraction value has to be paid. In most cases, raw materials are extracted with the aid of foreign companies, who have access to the necessary technical and financial means. Foreign investments occur through international bids, which are subject to the supervision of the Mining Ministry

Oil and Gas

For quite a long time oil has been extracted in Colombia. Already in the twenties, deposits were exploited, mainly for domestics supply, however, during the last fifty tears oil has been exploited in order to be exported.

Recently, many new deposits in various regions of the country have been discovered. Hitherto Colombia’s oil resources added up to about 2.2 billions of barrels. A relatively new, huge deposit near Cusiana and Cupiagua, in the eastern planes, has a potential of about 1,6 billions cubic feet of natural gas. Its exploitation started in 1993 and has increased the current production in about 50% ( to 844.000 barrels per day). In 1999 Colombia was the third more important oil exporter in Latin America.

Due to the above mentioned reasons, Colombia is now one of the most important oil products of Latin America. However, the government still declines to join the OPEC, because it is worried about not being able to fulfill compulsory export conditions OPEC members must comply with.

Oil exploitation rights belong to the state owned company  ECOPETROL, one of the most important buyers of European machinery, installations and pipelines. Taking into account Ecopetrol´s profits (1998: about 3.1 billions US dollars)  and its number of employees (10.500). Ecopetrol is one of the most important Colombian enterprises.

However, Ecopetrol exploits not all oil fields. Many foreign companies have acquired rights. Now days, the most important mining problems is represented by the country ´s different guerrillas, who every now and the damage the pipelines because they reject the export of raw materials due to ideological reasons. Foreign investments ate mostly managed in the form of an Association Contract with Ecopetrol.

Colombian natural gas reserves are estimated in cubic feet. Natural gas is only produced for domestic supply. Production will increase considerably due to the program of the “gas for people”. Up to this year it is believed that consumption will increase up to 800 million cubic feet and by 2010 around 40% of the population will be provided with natural gas through pipelines. Infrastructure works were finished last year.

Coal

Colombia has the largest reserves of coal in Latin America, consisting of high quality bituminous coal and a small amount of metallurgical coal. Due to the discovery of huge coal reserves in the northeastern department of la Guajira, the coal production has gained importance, especially due to its export potential.

The “Cerrejon Norte” coal deposit in the Guajira was tapped at a cost of about 3.6  billions US Dollars. Coal resources amount it three million tons, which partially lie deep down at 300 m below the surface. In 1996 the “Cerrejon Norte” production accounted for 60% of the national production,. The American company EXXON and the states owned company CARBOCOL are partners in the Cerrejón norte mine. Each company owns 50% of the project. New deposits are tapped by CARBOCOL, and they assure that nor only US technology is desired to develop these new deposits.

During the last year, coal export has turned out to be more and more important as earner of foreign currencies. But in the longer term domestic consumption will increase as well. For this reason the tapping of new deposits is now encouraged.

Emeralds

Almost 80% of the worldwide emerald production come from Colombia. The expert can recognize – just by the color-  from which region of the country the precious stone comes. The most famous ones are found in Muzo (departament of Boyacá)

The mining of emeralds – until recently in hands of the government -  is today in private ownership. By this way illegal mining and gang wars, wish fight against each other to get the best deposits, should be over.

Up to 1998, around 83 million dollar (fob) worth had been exported.

Nickel, Gold; Silver, Platinum, Iron Ore

Hitherto gold and platinum production has been undertaken in a fashion similar to the old days in Alaska. Moreover in the department of Chocó, many gold and platinum miners wash the desired metals with primitive instruments. Unfortunately, due to this method impossible to amend damages are caused: the mercury necessary for removing the gold flows down springs and rivers polluting water as well as fauna and flora.

National production of nickel is almost exclusively operated by the state owned company CERROMATOSO, which is now privately managed. Working at full capacity the mine produces about 20.000 tons per year.

Jewelry, mostly imitations of pre-Columbian originals, and emeralds have become more and more important export goods.