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Colombia a Good Deal for Mining and Energy Investors

Colombia a Good Deal for Mining and Energy Investors

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Colombia a Good Deal for Mining and Energy Investors

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  1. Colombia a Good Deal for Mining and Energy Investors Carlos Rodado Noriega Minister of Mines and Energy Seoul , August 12, 2011 We have what the world needs

  2. Content • Colombia: An Upcoming Emerging Market 2. Why you should invest in Colombia 3. Sustainable Mining in Colombia 4. Opportunities for Cooperation

  3. 1. An Upcoming Emerging Market Some key facts about Colombia Total Area: 1.141.748 Km2 Population: 45.657.937 Government: Democracy GDP: 307 billion USD Source: EIU

  4. 1. An Upcoming Emerging Market • COLOMBIA the C on the C I V E T S COLOMBIA INDONESIA VIETNAM EGYPT TURKEY SOUTH AFRICA

  5. 1. An Upcoming Emerging Market “The new BRICs are Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa (CIVETS). They are countries with major populations, dynamic, diverse economies, political stability and each of them has a brilliant future.” Michael Geoghegan, CEO HSBC April 26, 2010 in his speech to AmCham Hong Kong “Whether on security, democratic stability, or vibrancy, the strength of Colombia’s democracy is there for all to see” Eric Farnsworth, vice president of the Council of the Americas.

  6. Content • Colombia: An Upcoming Emerging Market 2. Why you should invest in Colombia 3. Sustainable Mining in Colombia 4. Opportunities for Cooperation

  7. Why you should invest in Colombia? • Mineral and Hydrocarbons Potential • Economic Stability • Political and Legal Stability • Healthy Business Environment • Improved Security

  8. 2. Why you should invest in Colombia? 1. MINERAL POTENTIAL We come from a mining tradition even before pre Hispanic times. However, Colombia has not fully developed its mining potential yet.

  9. Why you should invest in Colombia? • The basis of our potential

  10. 2. Why you should invest in Colombia? Mining a Driving Force Our Government has identified this potential and determined to make the mining industry, one of the key driver of economic growth by establishing a solid institutional framework Private investment is crucial for the development of this potential Hence, I would like to show you why you should be part of this beneficial process

  11. 2. Why you should invest in Colombia? 1. MINERAL POTENTIAL Variety of Minerals throughout an unexplored territory Key: Coal Gold Emeralds Source: Ingeominas Nickel

  12. Why you should invest in Colombia? 1. MINERAL POTENTIAL Geological Coverage Colombia still has 49% mineral potential to be discovered 51% 49% Source: Ingeominas

  13. 2. Why you should invest in Colombia? 1. MINERAL POTENTIAL Coal: Colombia is a Key player in the world and owns the biggest reserves in Latin America Cerrejon La Loma El Descanso Calenturitas Paz del Río • Large scale mining projects are located on the northern Caribbean Region and they extract thermal coal. • Small scale mining is concentrated in the Andean Region and extracts metallurgic coal. Source: Ingeominas Source: Ingeominas

  14. Why you should invest in Colombia? 1. MINERAL POTENTIAL Gold: Significant inferred potential Gramalote Titiribí La Bodega Angostura La Colosa • Major underground projects are still under the exploration stage. These are located mainly in Santander, Antioquia and Caldas and Tolima. Source: Ingeominas

  15. 2. Why you should invest in Colombia? 1. MINERAL POTENTIALNickel: Significant inferred potential Cerromatoso • Cerromatoso is the world’s second-largest producer of ferronickel and boasts some of the lowest costs. Source: Ingeominas

  16. 2. Why you should invest in Colombia? 1. MINERAL POTENTIAL Emeralds : Significant inferred potential La Pita Source: Ingeominas

  17. 2. Why you should invest in Colombia? • HYDROCARBONS POTENTIAL • Colombia, a country with hydrocarbon potential Total 54,681 MEPB Source: ANH, Nuevos aportes a la estimación del potencial de hidrocarburos en Colombia (2009).

  18. 2. Why you should invest in Colombia? In order to guarantee the supply of fuels and electric power, Colombia’s goal for the next 3 years is to sign 205 new oil exploration and production contracts, including contracts for non conventional hydrocarbon… To drill 570 new A3 exploratory wells… Source: MME – ANH * Number of wells with the current contract commitments, it can vary when new contracts get signed.

  19. 2. Why you should invest in Colombia? In order to reach an average production of 1.150 KBPD of crude oil (December 2014)… Forecast of Audited Crude Production 2011 – 2014 (Thousand of Barrels per Day – Kbpd) Total production Jul 30 2011 of 930 Kbpd Source: MME

  20. And an average production of 1.350 MPCD of natural gas in December 2014 Forecasted of Tradable Gas Production 2011 – 2014 (Millions of Cubic Feet per day – MCF/D) Source: MME

  21. 2. Why you should invest in Colombia? 2. Economic Stability “There are significant reasons to invest in Colombia”

  22. 2. Why you should invest in Colombia? • Colombia has a tradition of macroeconomic stability • During the 1980s, in contrast with other Latin American countries, it honored its external debt. • Never experienced hyperinflation 2. Economic Stability Sound Economy

  23. 2. Why you should invest in Colombia? 2. Economic Stability Colombian GDP is characterized for its stability World Crisis Asian Crisis Source: DANE

  24. Why you should invest in Colombia? 2. Economic Stability Faced Economic Crisis with Success • Colombia has faced the international economic crisis with great success, reporting positive growth rates throughout the decade. Graph: Proexport, Source: DANE (National Accounts), EIU (Market Indicators & Forecasts) Note: * EIU forecast to the World and Latin Focus to Colombia

  25. Why you should invest in Colombia? 2. Economic Stability Annual FDI net inflows have increased significantly Foreign Direct Investment, Total in Mines and Energy Source: Banco de la República

  26. 2. Why you should invest in Colombia? 2. Economic Stability Emerging Markets Bond Index Plus (EMBI+), basis point spread over US treasuries. Source: JPMorgan - Central Bank of Peru E

  27. 2. Why you should invest in Colombia? 3. Political Stability “There are significant reasons to invest in Colombia”

  28. 2. Why you should invest in Colombia? • Oldest democracy in Latin America • A sound protection of property rights is a well known colombian tradition • Our people welcomes foreign investors 3. Political and Legal Stability

  29. Why you should invest in Colombia? 4.Healthy Business Environment “There are significant reasons to invest in Colombia”

  30. Why you should invest in Colombia? • International institutions and magazines recognize Colombia as one of the main investment destinations • Colombia has shown a notable improvement both in business quantitative and qualitative rakings 4. Healthy Business Environment

  31. 2. Why you should invest in Colombia? 4. Healthy Business Environment International media recognizes the transformation Colombia is experiencing

  32. 2. Why you should invest in Colombia? 4. Healthy Business Environment Business friendly country Doing Business Ranking Variation, 2007-2011* (Change in positions) Source: Top Reformers Report, World Bank *Positive figures show improvements in business environment

  33. Why you should invest in Colombia? 4. Healthy Business Environment Colombia ranked among the top countries on investor protection Strength of Investor Protection, 2011 Ranking made up by 183 countries Source: Doing Business, 2011 (World Bank) Rating

  34. Why you should invest in Colombia? 4. Healthy Business Environment The Mineral Sector • All that is required to participate in the mineral activity is legal representation and an address in Colombia • The Mining Act sets the same rules and standards for foreign investors as it does for domestic ones • Mining licenses can be bought and sold by investors

  35. 2. Why you should invest in Colombia? 5. Improved Security “There are significant reasons to invest in Colombia”

  36. 2. Why you should invest in Colombia? 5. Improved Security Security improvements in recent years have also benefited the mineral sector by reducing attacks on industry infrastructure, attracting greater investments. Source: Ministry of Defense

  37. 2. Why you should invest in Colombia? 5. Improved Security Source: Ministry of Defense

  38. 2. Why you should invest in Colombia? All of the above facts have brought about a growing interest in Colombia

  39. Mining titles have increased more than 150% since 2002 2. Why you should invest in Colombia? Source: Sistema Información Minero Colombiano and INGEOMINAS

  40. 2. Why you should invest in Colombia? Important mining players trust Colombia Source: Distritos Mineros, MME

  41. Content • Colombia: An Upcoming Emerging Market 2. Why you should invest in Colombia 3. Sustainable Mining in Colombia 4. Opportunities for Cooperation

  42. 3. Sustainable Mining in Colombia Environmental and Social Commitment: Our reality Colombia is blessed with both mineral and environmental richness. The mineral sector is fundamental to Colombia´s prosperity, therefore an important challenge for our country is to manage and reduce any tensions between the two.

  43. 3. Sustainable Mining in Colombia Environmental and Social Commitment: Our reality

  44. 3. Sustainable Mining in Colombia Number of threatened species

  45. 3. Sustainable Mining in Colombia Volumen 6 Colombia owns 4010 orchid species (distribuited in 260 genus) 207 : Threatened Source: Sistema de Información sobre Biodiversidad de Colombia Año: 2007

  46. 3. Sustainable Mining in Colombia Volumen 4 Año: 2007

  47. 3. Sustainable Mining in Colombia For all of the above reasons, mining in Colombia has to be environmental and socially sustainable, applying the best practices

  48. Content • Colombia: An Upcoming Emerging Market 2. Why you should invest in Colombia 3. Sustainable Mining in Colombia 4. Opportunities for Cooperation

  49. Colombia - Korea Opportunities for Cooperation

  50. Given the above, there are opportunities for Korean Participation in Hydrocarbons E&P We would like to increase Korean presence in Colombia: