Bogota rejects request to return Prodeco mining titles

The Colombian government has rejected Switzerland-based mining firm Glencore's request to relinquish two of the mining titles associated with its Prodeco unit, although the concessions represent only a nominal share of the company's overall production.

Colombian mining regulator ANM declared the request to return Prodeco's DKP-141 and HKT-08031 titles "unviable" because of unfulfilled contractual obligations. But the two titles account for only a nominal share of Prodeco's recent production, with no output associated with the HKT-08031 title since before 2012 and only 113,000t associated with the DKP-141 contract in 2019 and 2020 combined, ANM data show.

ANM made no mention of the three titles that account for the majority of Prodeco's recent production in its press release. They are contracts 044-89, 285-95 and 109-90, which accounted for 8.8mn t, 3.7mn t and 1.5mn t of Prodeco's production in 2019, ANM data show. ANM told Argus it is still evaluating the request to return these other mining titles.

The regulator said Prodeco was informed of the decision about the DKP-141 and HKT-08031 titles on 6 April and has 10 days to appeal.

Unfulfilled obligations ANM president Juan Miguel Duran said it was not possible to approve the request to return the two titles because of unfulfilled contractual obligations. These concern the unified environmental management plan for the joint operation of the La Jagua mine and declarations regarding production and royalty payments.

ANM had formed an interdisciplinary group of government bodies to evaluate the legal obligations relating to Prodeco's six mining titles, namely five concerning the La Jagua mine and one for the Calenturitas operation. ANM was working with the government's environmental regulator ANLA and the regional environmental authority for the Cesar province, Corpocesar, to evaluate the status of environmental obligations and the environmental situation of mining projects.

As long as Prodeco meets its pending obligations to the state, the government will not be able to oppose the return of the titles, former mining minister Amylkar Acosta told Argus .

"The government is the most interested party in the conclusion of this process, so that it can offer those assets to other potential suitors," he said.

A number of companies have approached the Colombian government about potentially acquiring the licences for the Prodeco mining unit. Mining and energy minister Diego Mesa said there was "a lot of interest" in the Prodeco titles from "different companies" including Asian industrial coal consumers, without giving further details.

By Diana Delgado and Jake Horslen

Prodeco coal mining concessions mn t Title holder Contract 2019 production 2020 production Carbones de la Jagua HKT-08031 0.00 0.00 Carbones de la Jagua DKP-141 0.08 0.03 Prodeco - Carbones de la Jagua 285-95 3.66 1.00 Prodeco - Prodeco 044-89 8.82 2.38 Consorcio Minero Unido 109-90 1.55 0.76 Carbones El Tesoro 132-97 0.00 0.00 — ANM

Prodeco coal production by concession mn t

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