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| Quebradona |
The Quebradona copper-gold project in Colombia, a $1.4-billion venture by AngloGold Ashanti, has encountered another major setback. Colombia's National Mining Agency (ANM) rejected the company's request to suspend its contractual obligations for the halted project. This decision deepens the regulatory troubles surrounding the Quebradona project, which has already been delayed since 2021.
Colombia’s Regulatory Hurdles for AngloGold
AngloGold Ashanti had submitted two requests to Colombia’s National Mining Agency in 2023. The first was a plea to extend the exploration phase of the project, while the second sought to suspend obligations tied to its mining title. However, both requests were denied. The ANM cited a legal contradiction in granting both requests simultaneously, noting that suspending obligations and extending exploration could not coexist under the current legal framework.
Furthermore, the agency stated that AngloGold did not provide sufficient evidence to justify its force majeure claim. This marks a significant setback for the company, which now faces mounting regulatory and legal challenges in its efforts to move forward with the Quebradona project.
The Project's Environmental and Social Challenges
The Quebradona project, located in the Cauca Medio region of Antioquia, has been on hold since 2021. Colombia's environmental regulator, ANLA, suspended the environmental license due to concerns over technical gaps and environmental risks, including the potential harm to the Jericó ecosystem. Despite this, AngloGold remains committed to reviving the project by submitting a new Environmental Impact Assessment (EIA). The company aims to file an updated EIA by 2027, once it completes additional hydrogeological, hydrological, and geotechnical data collection required by ANLA.
However, opposition from local communities and environmental groups has cast doubt on the future of the Quebradona project. Tensions between the company and local farmers have escalated in recent years. In late 2023, AngloGold filed a lawsuit against farmers and environmental activists who had staged protests, accusing them of kidnapping and theft. These protests are part of a broader local resistance to the project, with concerns over environmental and social impacts.
Global Copper Supply Struggles
Globally, the Quebradona project is just one example of copper mining projects facing significant delays due to environmental, social, and governance (ESG) constraints. Recent studies estimate that over 6.4 million tonnes of copper production, equivalent to more than 25% of global mine output, is stalled due to such constraints. This highlights the growing challenges the mining industry faces as it balances economic goals with environmental sustainability and social responsibility.
In Colombia, only one large-scale copper mine is operational, El Roble, owned by Canada’s Atico Mining. Meanwhile, several other copper projects are in development, but regulatory uncertainties, such as new environmental rules and agricultural protection zones, are causing delays. The future of these projects remains uncertain, as Colombia grapples with how to balance mining development with environmental protection.
ScrapInsight Commentary
The rejection of AngloGold’s requests by Colombia's National Mining Agency highlights the growing friction between mining companies and regulatory bodies focused on environmental and social considerations. With over 25% of global copper production stalled due to ESG constraints, the future of the Quebradona project remains in doubt, and this could affect the global copper supply outlook.
