Gold Digging in Colombia: Mining Throughout Latin America

Gold Digging in Colombia: Mining Throughout Latin America

• Mining is an important source of foreign investment and development
• Rural populations are among the prime losers in mining operations
• Environmental protection is no match for multinational greed
• Governments are selling out their citizens

In the sixteenth century, the Spanish conquistadors were drawn to the Americas by a quest for riches; in their pursuit they were soon exploiting the land of its resources. Today, remarkably little has changed. Like the conquistadors, foreign companies today are seeking the fabled deposits of ores and minerals found in the western cordillera, the Andes chain. Mining technology has dramatically changed since the Spanish first reached South America: hand-dug tunnels have been replaced by open pits, and pickaxes supplanted by heavy machinery, explosives, and gargantuan dredgers. These mining methods, at times taking place in the heart of the Amazon, have had devastating consequences for the surrounding environment and local populations. In this respect, Colombia has become a poster child for irresponsible mining practices.

Currently, South America has more mining exploration than any other area in the world. 38% of global investment in metallurgical prospecting goes to South America, as well as 27% of all gold exploration. The area is particularly appealing to foreign investors because it contains a huge supply of cheap labor and because its mineral reserves are relatively untouched compared to the rest of the world. Although metal prices slumped from 2006 to 2009, they have since surged and we are now witnessing mining companies scrambling to invest. Analysts predict that in 2011 and 2012 alone, at least USD29 billion of mining investment will be funneled into the two mining leaders of the area, Chile and Peru. In Colombia, the mining sector constituted 4.5% of GDP and provided 24.8% of the country’s total exports, or USD7.3 billion dollars, in 2009. Mining continues to be a significant source of foreign investment and resource development for Colombia and the South America region.

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This analysis was prepared by COHA Research Associates Zoë Amerigian and Lindsey Pace

Friday, February 11, 2011
Research Memorandum 11.2
ENDS

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