Colombian regulator denies Glencore request to hand back mining contracts

Colombia’s national mining agency (ANM) announced on Wednesday that it has initially rejected the request by Switzerland-based Glencore’s Colombian coal mining firm Prodeco to hand back its two mining contracts.

Mines on care and maintenance

Prodeco had placed two mines – Calenturitas and La Jagua mines- on care and maintenance since March last year when the coronavirus pandemic commenced. The mines are expected to remain on care and maintenance until the formal process of relinquishing the contracts to the mining regulator (ANM) is complete.

According to an internal release to workers, Prodeco said that maintaining coal production at the Calenturitas and La Jagua mines would require a very significant amount of cash during the next four years, and it would be impossible to recover its initial investment.

Relinquishing two mines comprising five concessions

The Calenturitas and La Jagua mines are currently made up of five concessions. The sixth concession at La Jagua had finished in 2019.

Prodeco had requested ANM for relinquishing the five concessions after ANM had rejected the miner’s request to keep the operations on care and maintenance.

ANM rejects request for return of two contracts

ANM has currently rejected the request for the two contracts DKP-141 and HKT-08031 for concessions included within La Jagua citing that the miner has not met the required obligations, including for environmental management, making the request legally inviable.

ANM president Juan Miguel Duran said: “It’s not possible for the (agency) to approve the request for resignation because it is not up-to-date in complying with all contractual obligations at the time of submitting the resignation, as required by the mining code”

Duran added that the resignation requests for the three remaining concessions are still being evaluated.

Although the request to hand back the contracts DKP-141 and HKT-08031 has been rejected initially, the miner has the right to request to relinquish the concessions again in the future.

Glencore’s declining coal production

In 2020, Glencore’s coal production had plunged by 24% to 106 million tonnes, of which with Prodeco’s output had dropped 76% to 3.8 million tonnes. The production at Colombian coal mine Cerrejon which is jointly owned by Glencore, Anglo American, and BHP, had also dropped 52% to 12.4 million tonnes.

Written By Jonathan Norris
Jonathan is a founder of and has been covering the resources industry since 2018. With over 17 years experience in print, broadcast and online media, Jonathan has seen first hand the transformative effect of online niche media.