Colombia could be 'very good gold frontier' in near future

Nothing to do with Brazil, Monpirri, except that their COO happens to be Brazilian and was interviewed there.

Anglogold is a South African company.

They were talking about 500k oz per year. Sold at $900 per oz, that gives $450 million per year in revenues.

I doubt this will have much effect on the exchange rate. Revenues go to the producing company which is South African, so they will not be repatriated to Colombia (except that portion which pays for the cost of production). There will surely be a government royalty on the gold production, but 5% or 10% of the sales receipts is not that material, considering Colombia's population ($450mm * 10% royalty = $50mm / 40 million population = $1.25 per head).

What it will do is provide jobs, infrastructure and technical know-how. And encourage more exploration. With modern techniques and lots of exploration drilling, there is the possibility of finding more huge deposits.

"this may seem a strange post but it is not...when in colombia men need to be aware that colombia women may try to be seductive and entice a travelling gringo to have sex with them..to be forewarned is to be forearmed..." -- pow wow

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Great! Another natural resource to be stolen by the Colombian oligarchy and multinational mining companies . Of course, the local people will benefit from those great low paying jobs in dangerous conditions and all the environmental damage sure to be caused by the mining companies.

I'm so hip, I have difficulty seeing over my pelvis.

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I am not for government control of industry, nor am I anti-capitalist. However, this situation will end up in a giant cluster fuck where the local community will get nothing while whoever bribes the right people will end up making a killing off stolen royalties. Meanwhile, any occupational safety and environmental standards will be completely ignored by those running the operation. Sadly, this is pretty much business as usual in Colombia and most of the third world when it comes to natural resources.

I'm so hip, I have difficulty seeing over my pelvis.

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slguy. The very rich familes in Colombia that control most of the resources are often referred to as "Oligarcas" because they effectively are. It is a very common and widely used term in Colombia.

I'm so hip, I have difficulty seeing over my pelvis.

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"figure they'll be MBA's lining up to work the mines?"

So I guess uneducated people deserve to work for low pay in unsafe conditions while their surrounding environment is destroyed. Unfortunately, the people that would develop and run such an operation will likely have that attitude.

I'm so hip, I have difficulty seeing over my pelvis.

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I am not so concerned about the fact that they will pay manual laborers poorly, but swinging a pick is not the only job at a mine. Machine operators, engineers and all sorts of other skilled laborers will also be paid poorly. Even so, that is not my only beef.

I don't see why safety and environmental issues are a separate discussion as they are central to this topic. Even ignoring those supremely important issues, the main problem is that while the mining companies and a few Colombians will make millions, the local community will see very few financial benefits. I am not sure how mining works in relation to royalties in Colombia, but when it comes to Oil, the local departments and communities are entitled to certain royalties. Sadly, these are usually stolen before they ever reach their intended recipients. So on top of the likely environmental and health problems they will have to deal with, the local communities will receive little to none of the compensation to which they are entitled. That sounds like a negative outcome to me.

I'm so hip, I have difficulty seeing over my pelvis.

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I have never suggested socialism or stated that capitalism is bad. However, capitalism and fairness to workers and local communities do not have to be mutually exclusive. If the mines were run in a manner that responsibly deals with environmental, workplace safety and local economic concerns, I would be all for it.

I'm so hip, I have difficulty seeing over my pelvis.

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CG -- "Sadly, this is pretty much business as usual in Colombia and most of the third world when it comes to natural resources."

CG, haven't you been paying attention to the news? Business as usual in third world countries lately is to

1) Invite a foreign resource company in who'll invest heavily and find your resources for you. Then
2) A socialist government comes in, rips up the contract and stakes a claim to the value created by the foreign company (cf Bolivia, Venezuela).

Think about how you'd feel if you bought a block of land and built your own house to live in. Once the house is complete, a government guy shows up and says "You're doing OK and there are so many homeless people. How about you find somewhere else to live, cause we need this house more than you do." How would you feel if that was your house?

"this may seem a strange post but it is not...when in colombia men need to be aware that colombia women may try to be seductive and entice a travelling gringo to have sex with them..to be forewarned is to be forearmed..." -- pow wow

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Whoever said I supported nationalizing industries? I don't think that is a good idea. I simply pointed out the realities of these kinds of projects.

I am not against exporting natural resources, but simply believe that it should be done in a responsible and fair manner which benefits Colombia's economy and people. If that makes me a socialist or whatever other label anyone may want to throw at me, then so be it.

I'm so hip, I have difficulty seeing over my pelvis.

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CG, never attributed those words to you.

But you claimed that foreign companies are "stealing" resources. And asserted that was business as usual for third world countries.

I am just pointing out that several third world countries pulled some dishonourable tactics recently. They welched on their agreements and did genuinely steal foreign companies' assets.

"this may seem a strange post but it is not...when in colombia men need to be aware that colombia women may try to be seductive and entice a travelling gringo to have sex with them..to be forewarned is to be forearmed..." -- pow wow

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Colombiangringo is right. Gold extraction now basically involves the heap leaching process, in which vast parts of a mountain are blasted out, the ore (usually a 1/10 oz. per ton or less) is crushed and then a cyanide-arsenic wash is poured over a small hill of the crushed ore. The leach is collected and then electrochemically treated to extract the gold. Then, somehow, the cyanide-arsenic leavings are disposed of...er, safely. Usually the children of the locals suffer from this "safe" disposal, while the royalties go to the benefit of the children of those well connected. Gold is almost as bad as oil for its adverse impact on both local and national social norms. Colombians have suffered for centuries as a result of the lust for gold, from conquistadors to unrepetantly greedy politicos - time for the Colombian people to say no.

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Bopenyan -- "Usually the children of the locals suffer from this "safe" disposal"

"Usually"... what percentage of the time would you say? I am interested in large scale commercial projects, not itinerant individual miners in Colombia. Could you cite some evidence to back up that percentage? Thanks.

"this may seem a strange post but it is not...when in colombia men need to be aware that colombia women may try to be seductive and entice a travelling gringo to have sex with them..to be forewarned is to be forearmed..." -- pow wow

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Pedro

Newmont's operations and dumping of waste in Buhart Bay (reported in the New York Times and by many environmental activist groups) is just one. You may also want to google Cajamarca, as the New York Times has reported on unrest, demonstrations and barricades initiated by local villagers protesting the devastation caused by mining operations there.

For further information on the devastating impact of large scale mining, google "environmental impact large scale mining".

Also, in British Columbia, a proposed large scale goldmine using heap leachate process was sidetracked after environmental and first nations groups were able to provide convincing evidence that the proposed containment of tailings ponds was insufficient and would release toxins into rivers that provided an important source of food for the First Nations peoples residing there.

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Bopenyan.

I asked you to justify your statement that there is "usually" environmental contamination, by giving some percentages and evidence of those percentages. You haven't done that.

It's as if I suggested that passenger flights "usually" end in a plane crash. When asked for evidence, I cite a couple of plane crashes. That's not convincing at all.

If you want to say there is a risk of environmental contamination, then obviously there is. If you want to say there is "usually" environmental contamination, I think you are wrong.

"this may seem a strange post but it is not...when in colombia men need to be aware that colombia women may try to be seductive and entice a travelling gringo to have sex with them..to be forewarned is to be forearmed..." -- pow wow

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