Exploration Projects in Colombia Face Increasing Uncertainty as Another Town Votes Against Mining

People gathered outside Sucre’s small church, anxious to hear the news. A farmer climbed the church’s steps and read out the referendum results into a megaphone. The flag-bearing crowd of campesinos erupted in joy.

It was the first Sunday of October in Colombia, and Sucre, population 7,000, had just held a special referendum in which residents were asked if they wanted mining and oil projects in their mostly agricultural county. Ninety-nine percent of voters said “no” to mining, fearing that plans for a large limestone mine would pollute local water sources and affect the region’s dairy farms.

Photo: Residents of Sucre celebrate results of a special referendum on October 1. In this small Colombian town, 99% of voters said they did not want mining projects in the mostly agricultural county. (Credit: Juan Carlos Higuera)

“This was a vote for life,” said Marelba Quiroga, a 60-year-old campesina. “We want to preserve this territory for future generations.”

With the October 1 referendum, Sucre became the seventh Colombian county or municipality to vote against mining or oil exploration this year. Another 40 counties have expressed interest in holding similar referendums, including two oil-rich municipalities in the department of Meta.

The referendums, known in Colombia as consultas populares, have become a threat to oil and mining companies developing new projects in Colombia and could potentially force the national government to backtrack on licenses that it has already granted. Analysts say that these locally organized referendums could also change how Colombia grants licenses in the future.

“These referendums have created a lot of concern among investors,” Santiago Ángel, director of the industry’s Colombian Mining Association (ACM), told Finance Colombia. He added that there are worries about anti-industry campaigning that is “laden with misinformation.”

A poster outside a farm in Sucre urges residents to vote against mining. (Credit: Manuel Rueda)

The spate of local referendums started in March, when the municipality of Cajamarca in Tolima voted to ban mining from its territory. Cajamarca’s residents said that plans by South African mining company AngloGold Ashanti to set up a massive goldmine in the area would pollute three rivers and change the municipality’s emphasis on agriculture.

“It was a way to send a message to the national government and tell them we don’t want that,” said Jimmy Torres, an environmental activist who campaigned for the Cajamarca referendum. “The government is making deals with companies and handing out licenses without seeking [prior] consent from the community…and that bothers people a lot.”

“These referendums have created a lot of concern among investors” – Santiago Ángel, director of Colombia’s National Mining Association

Johannesburg-based AngloGold suspended exploration in the area following the referendum, in which 97% of voters rejected mining, but the company has still not renounced its titles.

The company said in a statement that it is hoping it can “build consensus” with the community to develop responsible mining in the area. AngloGold estimates that its mine in Cajamarca could contain up to 28 million ounces of gold, which would be worth more than $30 billion USD at today’s price.

“Diverse reasons — which range from the institutional, the political, and particularly the social, with the recent referendum — oblige us to take the unfortunate decision to stop all project activities, and with it all employment and investment, until there’s certainty about mining activity in the country and in Tolima,” said AngloGold in a statement.

Election judges count mining referendum votes at a voting center in Sucre on October 1. (Credit: Juan Carlos Higuera)

In Sucre, the latest municipality to hold a referendum, local residents also said that mining would threaten local water sources. A study conducted by a local consortium of environmental groups and universities claims that the area’s largest mining title, called JGL 111, would have put 26 local streams at risk and could have left up to 1,500 people without a reliable source of water.

“Communities have now discovered that they have a tool to reject these decisions imposed on them by the central government.” – Diana Rodríguez of Dejusticia

Sucre Mayor Javier Antonio Rojas pushed for the anti-mining referendum. He told Colombia Finance that he was also bothered by the national government’s practice of not seeking consent from municipal governments before issuing mining titles. “Please don’t make decisions from a desk in Bogotá without coming here,” he said.

So what is the effect of these referendums? Minister of Mines and Energy German Arce has said that these local elections are not “legally binding” because, according to his view of the Colombian constitution, the national government owns the resources that lie under the country’s soil and is entitled to govern their use and distribution.

But Diana Rodriguez, an environmental analyst at human rights think tank Dejusticia, told Finance Colombia that the minister has an “incomplete understanding” of Colombia’s laws.

According to Rodríguez, a 1994 law on municipal government says that municipalities have the right, through local consultations, to make decisions on economic activities that change how land is used. A 2016 ruling by Colombia’s Constitutional Court reaffirmed the legality of municipal referendums and also said that municipalities can regulate mining activity if they fear exploration could do environmental damage.

Rodríguez said that municipalities could potentially use referendum results in lawsuits against mining titles.  Whether a referendum can lead to the cancellation of a mining title is something that will have to be sorted out by the courts, said Rodríguez.

“The way in which mining decisions were being carried out in this country was very centralized,” said Rodríguez. “Communities have now discovered that they have a tool to reject these decisions imposed on them by the central government.”

Sucre’s farmers are staunch opponents of mining projects in their region. Many people in Sucre raise cattle for dairy products, others grow blackberries. (Credit: Juan Carlos Higuera)

Orlando Velandia, president of Colombia’s public National Hydrocarbons Agency (ANH), told Finance Colombia that the 2016 high court decision is already changing some procedures. Velandia said that his agency is now trying to build consensus with municipal councils before handing out new mining titles.

According to Colombia’s Ministry of Mines, the ANH and its sister titling agency, the National Mining Agency, have visited more than 90 municipalities during the past six months to seek consensus for mining and oil projects.

“We cannot afford to lose this industry…I think we can save this marriage.” – Orlando Velandia, president of the ANH.

That’s not to say that Velandia is happy with the referendums. The ANH president believes that in many cases the votes have been held with little prior discussion on the actual pros and cons of mining and oil exploration. In his view, campaigners have often presented voters with “false” dilemmas.

Velandia said the national government will continue to promote mining and oil despite the referendum results. Even with more votes planned across the country, the national government is still providing incentives to the oil industry, including tax refunds on oil exploration work.

The Colombian government currently relies on these industries for roughly 25% of tax revenue, and oil alone makes up more than 40% of the country’s exports, according to the ANH. Income from oil and mining is especially vital for the country as it enters its so-called post-conflict era and works to develop remote areas that have long been under the grip of insurgent groups, Velandia said.

“We cannot afford to lose this industry,” said the ANH president.

In a country where mining has become a hot-button issue pitting the private sector against rural farmers, he hopes that the municipalities and voters consider all the implications wrapped up in these referendums.

“We urge them to not make rushed decisions,” said Velandia. “I think we can save this marriage.”