Colombian exports of non-mining goods showed consistent growth through the first nine months of 2024, reaching $16.1 billion, according to data from the Ministry of Commerce, Industry, and Tourism based on figures from the National Administrative Department of Statistics (DANE). This marks an 8.3% increase compared to the same period in 2023, when non-mining exports amounted to $14.9 billion. In terms of volume, non-mining exports grew by 9.5%, totaling 6.8 million tons.

Demand for Colombian non-mining products has fluctuated across international markets, but exports to key partners like the United States, Mexico, and Venezuela have shown notable increases. Exports to the United States rose by 8.6%, while Mexico and Venezuela saw increases of 22.5% and 47.4%, respectively. Other markets also saw growth, with exports to Belgium increasing by 33.7% and the Netherlands by 3.9%.

Industrial and Agricultural Sectors Drive Export Growth

Industrial products, which account for about 62% of Colombia’s non-mining exports, grew by 4.1% year-over-year. Key industrial exports included electrical machinery and equipment, which rose by 30.3%, and cosmetics and beauty preparations, up by 26.4%. Exports of plastics and related products grew by 10.6%, while sales of insecticides and fungicides increased by 4.1%.

Agricultural products, comprising 37.8% of Colombia’s non-mining export basket, grew by 16% through September. Significant increases were observed in exports of Tahiti lime (69%), bananas (48.6%), Hass avocado (42.4%), and passion fruit (20.2%). Coffee exports rose by 11.6%, while cut flower exports increased by 12%. Tilapia fillets saw a modest increase of 7.6%.

Regional Contributions to Export Growth

Several Colombian regions played a prominent role in the export growth of non-mining goods. Risaralda saw the largest percentage increase, with exports reaching $639.9 million, up 58.9% year-over-year. Huila exported $677.1 million worth of non-mining goods, representing a 35.3% increase, while Santander reported $253.6 million in exports, marking a 12% rise.

Bolívar contributed $1.38 billion in exports, showing a 10.1% growth, and Antioquia led with $3.02 billion in non-mining exports, a 9.1% increase. Other regions also contributed, reflecting a broad geographic distribution of Colombia’s non-mining export growth.

Government’s Strategy and Export Support

According to Minister of Commerce, Industry, and Tourism Luis Carlos Reyes Hernández, the government is focused on sustaining export growth by supporting regional businesses. The Ministry is working with local entrepreneurs to help them access new markets, providing various resources and support tools to boost Colombia’s international presence in non-traditional sectors.

The rise in Colombia’s non-mining exports reflects ongoing efforts to diversify the country’s export base, moving away from traditional reliance on mining and energy products. This trend underscores Colombia’s strategic push to leverage its agricultural and industrial sectors to enhance trade resilience and support economic growth.

James A. Robinson (Why Nations Fail) has been named the co-winner of the Nobel Economics Prize for 2024. He is a man who has spent decades studying the relationship between economic growth, wealth, and equality. He has forgotten more than most of us will ever know about the subject—but it’s hard to forget what he had to say about Colombia back in 2018, largely because little has changed since then. I am paraphrasing, but you will get the point.

Robinson stated that the ecosystem in terms of land distribution was probably worse than in 1961. Just last week, the Petro Government handed back over 3,280 hectares of land illegally seized during decades of violence, but it is a drop in the bucket, and even that is opposed by the land barons of the right. Colombia should be a breadbasket of agriculture, but of its 30+ million hectares of productive land, only 4 million are used.

Robinson also touched on tax reform during his visit, and no surprise, we are seeking another one at the moment. His hypothesis, which still holds water, was that those creating these reforms are the same ruling elite who don’t pay their share. The same remains true; the elite pay a fortune in accountancy bills to avoid paying. Last week, it was announced by DIAN (National Directorate of Taxes and Customs)  that 12,000 savings accounts would be frozen by month-end until those owning these accounts paid their outstanding tax bills. This is encouraging to a point, but it won’t be the top 0.5% who find their accounts frozen; instead, it will be the middle class who constantly get squeezed.

You don’t have to be a Nobel winner to be aware of Colombia’s most dangerous disease: corruption, but Robinson made a note of it anyway. It doesn’t exist in isolation, and the political institutions are at the very heart of the problem. That certainly hasn’t changed. Congress at the national level, as well as the governor’s and mayor’s offices, are awash with corruption—they are figuratively bleeding Colombia to an economic death.

I am paraphrasing my countryman, but he had it spot on with this: “The real problem in Colombia is that people don’t think it’s bad to be a clientelist; they don’t think it is bad to evade taxes…there is no political will to do anything about it”—his words still hold true.

As for this week, the Labor Reform will be top of the bill. Thus far, 64 of the 80 articles have been approved. Hopefully, it is passed speedily. Entities such as FENALCO (National Federation of Merchants and Entrepreneurs) (and no doubt ANDI—National Business Association of Colombia—will also comment) are complaining it will increase costs. Ex-President Uribe, who brought in many of the current rules, is also pushing back. Frankly, many of them are Dickensian by modern standards and need removing. It may not address the huge issue of informal labor (56% as of August), but at least it brings a little more dignity to those who do have a job in the formal sector.

Have a great week, and congratulations again to Dr. Robinson.

Roops

On September 19, the Medellín based energy company EPM closed the right diversion tunnel of Hidroituango. This collapse of this structure caused the downstream emergency at the Hidroituango dam in 2018, which resulted in the temporary evacuation of over 23,000 people, and multimillion dollar cost overruns and delays for the hydroelectric project critical for Colombia’s electrical supply.

John Maya Salazar, general manager of EPM, mentioned that “EPM applied all its capacity and experience to close the right diversion tunnel, using engineering techniques unprecedented in the world and cutting-edge and innovative technology, which today becomes valuable knowledge and learning for its application in other infrastructure projects.”

Hidroituango. Photo by Journalist Loren Moss

Colombian Politicians React

The mayor of Medellín, Federico Gutiérrez, celebrated the closure of the Hidroituango tunnel alongside Andrés Julián Rendón, governor of Antioquia, and John Maya, EPM’s manager. According to the mayor, this action “greatly reduces the risks for downstream communities.“

However, the President of Colombia, Gustavo Petro, spoke at a press conference, stating that “The Hidroituango dam should never have been built, nor should the Quimbo dam. That is the reality.“

In response to this comment, Federico Gutiérrez, through his X account, said: “We definitely envision two very different models for the country. You bet on degrowth, and we bet on growth.”

A Project Surrounded by Scandals

This hydroelectric plant is located on the Cauca River and is the largest in the country; however:

• It cost $11.4 trillion pesos (E2.85 billion USD) but has had cost overruns estimated at $1.5 trillion pesos (375 million USD).
• There were cost overruns due to landslides that delayed it by 20 months and cost $370 billion pesos (92.5 million USD).
• The environmental license for developing the project has been questioned and modified more than 12 times.
• The previous governor Luis Pérez denounced in October of 2018 that the definitive closure of the two main tunnels and the construction of a third were done without authorization from ANLA (National Environmental Licensing Authority).
• The Comptroller’s Office opened a preliminary investigation into EPM for the third tunnel Auxiliary Diversion Gallery (GAD), which began construction in August 2015, but the request to modify the environmental license to do so was submitted in July 2016. 

Nonetheless, according to EPM, as of August of this year, Hidroituango has achieved 93.10% progress. Today, units 1, 2, 3, and 4 are operating, generating 1,200 megawatts of clean and renewable energy for Colombia.

Headline photo: Hidroituango tunnel. provided by Ecopetrol

Under Colombia’s recently enacted Pension Reform, or Law 2381 of 2024, employers will now bear responsibility for social security contributions of contractors employed under service contracts. Set to take effect on July 1, 2025, this change brings significant administrative implications for businesses.

Law 2381 introduces a “pillar system” for organizing contributors based on factors like age, weeks of contributions, and economic capacity to support the system. However, the law also mandates that employers will be accountable for social security contributions for all service contractors, adding a new compliance layer for companies that rely on this workforce model.

Current System and Upcoming Changes

As it stands, Colombia’s pension system operates under Law 100 of 1993, which requires independent contractors with service contracts to pay their own social security contributions. Typically, contractors receive their full fees from clients, without deductions for social security, making them solely responsible for contributions through the Planilla Integrada de Liquidación de Aportes (PILA).

This framework is set to change with the passage of Law 2381, particularly Article 7. “Under the new law, companies will need to manage not only their employees’ social security contributions but also those of service contractors. Companies must withhold a portion of the agreed contractor fees to cover health and pension contributions,” explained Andrés Romero, an associate at law firm Godoy Córdoba. For contractors who opt for voluntary pension contributions, employers will need written authorization to deduct these additional amounts.

Responsibilities for Employers

Under the new rules, businesses must withhold the necessary contribution amounts from contractor payments, ensure timely remittance of these funds, and keep contractor data up to date. Even if deductions are not made, companies will remain liable for the full contribution amount. Employers must also provide contractors with information about their chosen pension fund options and respect their selections. Additionally, they are required to report employment updates to the relevant social security institutions, including any benefits or entitlements.

For companies, this change increases administrative obligations by adding a formalized process for withholding and paying social security contributions on behalf of service contractors.

Challenges for Businesses

The new policy introduces a heavier administrative load on employers, sparking concerns within the business sector. The administrative and financial implications may be substantial, particularly for small and medium-sized enterprises with limited resources to handle the added workload. Many business representatives have voiced concerns that these requirements could increase operational costs and affect long-term viability, given the additional overhead for compliance.

The reform has reignited debate on balancing pension reforms with business needs, as companies argue for policies that consider their operational capacities and financial sustainability. While policymakers seek to improve social security coverage and reduce evasion, businesses are advocating for a balance that minimizes added burdens on employers and allows them to remain financially stable in the face of new non-operational costs.

As the law takes effect in 2025, companies across Colombia will need to prepare for these changes, potentially reshaping the country’s labor and pension landscape.

It’s only been a week, but it feels much longer. Even without reform debates in Congress, there’s been a lot happening… let’s take a look.

1. How much of a poker player is the Ministry of Finance led by Minister Ricardo Bonilla (above photo)?
2. How did the Central Bank of Colombia – Chairman Leonardo Villar justify the latest interest rate cut?
3. How weak is the peso, and will it last?
4. What were September’s unemployment figures from the National Administrative Department of Statistics – DANE?
5. How did vehicle sales fare in October, according to National Association of Industrialists ANDI and Colombian Federation of Merchants and Entrepreneurs FENALCO?
6. Why was cocaine in the news at COP16 Colombia?
7. What’s the outlook for natural gas in 2025? Ecopetrol / Empresas Públicas de Medellín – EPM.

Eclectic as you like! Thanks for your time…

Best regards,

Rupert Stebbings.

Attorney General Luz Adriana Camargo (above photo), during an interview, confirmed that there was indeed a payment by the Colombian government to acquire the Pegasus spyware. She stated that she personally accessed a confidential document from Israel’s Financial Intelligence and Analysis Unit (UIAF), which provides clear evidence of the payment.

Camargo also added that: “According to the information in that document, the suspicious transaction alert indicates that the money arrives in cash, in U.S. dollars. It is certain because there is a currency exchange form that records the entry of the money into Israel. However, as stated by the official, Pegasus has yet to be found in any Colombian entity.”

The current Minister of Defense, Iván Velásquez, held a press conference and indicated that any equipment containing Pegasus may have been destroyed to erase any trace of this spyware.

Diplomatic Break with Israel Has Complicated the Investigation

The Attorney General explained that the diplomatic break between Colombia and Israel has complicated the progress of investigations, making it challenging to “conduct verifications.” She also added that: “For instance, things we could have done directly with the Colombian embassy in Israel are no longer possible. We could have obtained statements from NSO by traveling to Tel Aviv, but the embassy is closed because we no longer have relations,”.

However, the government says that the Ministry of Defense will send a team to Israel to further investigate this situation.

Controversy Among Government Figures

The Inspector General of Colombia, Margarita Cabello, had denied that the Pegasus program was purchased under the administration of Iván Duque. She stated, “We have conducted two investigations: one following complaints from magistrates of the high courts, and another after the presidential address. As of today, we can tell you that there are no official traces of the program’s existence.”

Nevertheless, President Petro cited an article published by RTVC (Public Media System) allegedly confirming connections between the Inspector General’s office and a figure implicated in the Pegasus purchase. In his tweet, the president stated:

“Dismissing information that reveals the connection between the Colombian far-right and the complete breakdown of democracy, while employing someone in her office who should be thoroughly investigated for overseeing Dipol at the time of the Pegasus transaction, is clear proof that in Colombia we haven’t had oversight bodies working for the people.”

The RTVC article cited by Gustavo Petro is no longer available on the media outlet’s website.

Colombia has recorded a steady increase in non-resident visitor arrivals, with recent data from the Ministry of Commerce, Industry, and Tourism showing a 9% rise in arrivals from January to September 2024, compared to the same period in 2023. The report, based on figures from Migración Colombia, indicates that 4,798,676 non-resident visitors entered Colombia during this period, up from 4,402,953 the previous year.

Excluding Venezuelan nationals, foreign visitor numbers grew by 10.9%, reaching 3,157,951 compared to 2,847,393 over the same timeframe in 2023. Returning Colombian residents also increased, with 1,264,145 arrivals, a rise from 1,149,097 in 2023.

The United States continues to be the primary source of foreign visitors, accounting for 27.1% of international arrivals, followed by Mexico, Ecuador, and Venezuela.

Regional Destinations

Bogotá remains the leading destination for international visitors, attracting 37.4% of total non-resident arrivals from January to September 2024. Other popular regions include Antioquia, Bolívar, and Valle del Cauca.

In September alone, Colombia saw 338,098 non-resident foreign visitors, representing an 8.3% increase from the 312,056 arrivals in September 2023.

Government Initiatives and Minister’s Statement

Minister of Commerce, Industry, and Tourism Luis Carlos Reyes Hernández, commented on the country’s strategy to strengthen non-traditional destinations through community-based tourism projects. “The government’s efforts are drawing international visitors interested not only in our biodiversity and cuisine but in cultural and peace-centered experiences throughout the regions,” he said, emphasizing the country’s aim to lead in inclusive and sustainable tourism development.

Air Travel Connectivity and Passenger Movement

Air travel data from Aerocivil underscores the growth in passenger movement, with 36.5 million air passengers between January and August 2024, marking a 16.6% increase compared to the same period in 2023. Of this total, 21,396,807 passengers traveled on domestic flights, while 15,127,233 were on international flights.

Domestic air travel saw a 13.7% rise, while international travel increased by 16.3% over the period. Pereira reported the largest growth in domestic passenger arrivals at 34.2%, followed by Bogotá at 20.9%. Among international destinations, San Andrés saw a 61% rise in arrivals, and Cúcuta recorded a 38.9% increase compared to 2023.

Tourism Promotion Campaign

The “Colombia, El País de la Belleza” campaign has played a role in enhancing the country’s visibility on the global stage, insists the minister. “Our campaign has positioned Colombia as a well-known destination with much to offer, contributing to the rise in visitor numbers,” Minister Reyes added. The government aims to continue strengthening all aspects of the tourism value chain to meet the needs of non-resident visitors and support a diversified tourism offering.

Bogota photo courtesy of Cushman & Wakefield.

Tecnoglass, Inc. (NYSE: TGLS), an innovative manufacturer of aluminum and vinyl windows and architectural glass, announced it will attend the Baird 2024 Global Industrial Conference in Chicago, Illinois, on November 13, 2024.

The conference will provide Tecnoglass an opportunity to engage with industry stakeholders and investors, highlighting its current market strategies and performance across the commercial and residential sectors.

Headquartered in the USA and with factories in Barranquilla, Colombia, Tecnoglass Inc. produces high-end architectural glass and windows for the U.S. and Latin American markets. The company operates a 5.6 million square foot manufacturing facility with integrated processes aimed at efficient production and distribution. The U.S. market is Tecnoglass’ primary revenue source, accounting for 95% of its sales, with a customer base of nearly 1,000 across North, Central, and South America.

Tecnoglass serves multi-family, single-family, and commercial end markets, and its products have been used in high-profile projects such as One Thousand Museum and Paramount Miami Worldcenter in Miami, Salesforce Tower in San Francisco, Via 57 West in New York, and Hub50House in Boston. In Latin America, Tecnoglass has supplied glass for projects such as El Dorado International Airport in Bogotá, One Plaza in Medellín, and Pabellón de Cristal in Barranquilla.

For more on Tecnoglass’ operations, visit the company’s website or view their corporate video.

CGS, also known as Colombia Gold Summit, is the most important mining event in Colombia focused specifically on precious metals exploration and mining, primarily gold. The event takes place every year in Medellín and has also expanded to now include similar versions in Ecuador and México. The annual event, put on by Paul Harris and his team, is especially attractive because it features both financial and technical content, bringing together the investors, speculators, operators, and geologists from across the industry into one place.

CGS also highlights corporate responsibility, with not just token representation, but environmental, social, and governance issues woven throughout the agenda. One area of longstanding emphasis has been the participation of women in mining at all levels from labor to management and board representation.

Finance Colombia publisher Loren Moss was able to catch a moment with a very busy Paul Harris during CGS 2024 to talk about the event’s impact, relevance, and success for Colombia, Latin America, and the mining sector.

Finance Colombia: I’m here with Paul Harris at CGS 2024. Paul, I’ve been attending your events now I think for almost 10 years. They continue to be the most important precious metal mining events in Colombia; but you’ve also expanded now and you cover Ecuador, Mexico and different countries. Tell me, what has been the key to your success for you and your whole team? I know it’s not just you, of course, but Colombia Gold Letter, your publication, and then also your events team.

Paul Harris: Well first off Loren, thank you very much for the kind words. But I think a big part of it is the fact that I’ve been in the sector, in and around the sector for 28 years, and over that period of time I’ve got to have a certain level of understanding about the gold sector, about the silver sector, about the copper sector…and that fed into the programming of the events. You know, identifying good speakers, both in terms of the content and their ability to communicate, because at the end of the day, part of it is—let’s say, entertainment as well. Identifying good speakers, talking on good subjects; picking subjects that are important, or emotive, that are relevant. There’s no fluff in our program, and I think that’s one of the key things.

Finance Colombia: I agree. And one of the things, I learned so much…I mean, it’s funny because I remember when I first started attending, and now I listen and I can understand about half of the things that the geologists are talking about. I understand…I have an investment background, so I understand that side a little bit more. But you get, you know, a lot of events are like, industry parties, or, you know, strictly sales-focused, but there’s so much educational content. A lot of years there are geologists that come in and give classes and things like that. But then, even, you also have a good mix of—And tell me about the importance of this: You have people on the investment side, but then also on the technical side, and I think it’s the only event that I’ve seen that really balances both of those.

“They said to me every year they get contracts here.” – Paul Harris

Paul Harris: Well, I think there’s a couple of things there, with the programming. I put things in the program that I want to know. I’ve got a background as a journalist and analyst, as you know, so I’ve programmed things that I want to find out, questions I want answered, so I tend to find people to do that, and I think that resonates with the audience. Because through that you get that balance of things focused more on the investment side of things, things focused on the technical side of things, because all the communities and environment as well, all of these things are necessary for a successful project. I have questions I want answered on all of those aspects, and so that’s a key part of the program and I think that’s a key reason people attend the event.

Finance Colombia: And another thing that I’ve seen is: I’ve seen you have a lot of support from sponsors. I think it speaks to the value of the event to see the same sponsors year after year. We see people like HD, JC Portal, and I’ve gotten to know some of these people really just kind of through your events. Caterpillar, for example, their local people, and then, of course, the different mining companies: Continental now Zijin, Collective, and Aris, and some of the other ones. Have you gotten feedback as to the value that this event brings to the different sponsors and participants that you have?

Paul Harris: Absolutely. A lot of the sponsors we have that have come year after year, one of the reasons they keep coming year after year—and a great example would be MPX Geophysics, which is now Xcalibur Geophysics; they said to me every year they get contracts here.

They meet with the exploration teams, they talk about what the exploration teams are doing, what their work plan is for the next 12, 18 months. They always go away with a contract, come away with a contract. I’m sure that’s the case for some of our other supply companies that are here, that have participated in the commercial exhibit and sponsor the event.

Finance Colombia: We are in an uncertain time right now in Colombia when it comes to political risk. I mean, it could be a lot worse, it’s not as bad as some other countries in the neighborhood. But still, I’ve noticed that it’s even more important, and I see that not just people on the investment side but on the operational side, they want to come and hear about what’s happening. Sergio Guzmán spoke yesterday, he’s always really good. And I think that it’s been a conduit for information-gathering. Not just learning, but really in staying up to date with the legislative environment, right?

Paul Harris: Well, I think the mining sector is a long-term business. The mining sector manages risk every day, the mining sector is very good at managing risk. People just want to know what the risks are and have clarity on the risks there are. The worst thing for investors is uncertainty.

Investors can manage risk. They can price in risk, but they need to know what the risks are. That’s why we always start the event with an overview, looking at country risk aspects, market risk aspects. And as you mentioned, Sergio from Colombia Risk Analysis does a very good job in breaking that down, telling people what are things to watch out for, and as I’ve mentioned, he’s very entertaining, so he really enables his messages to get across and penetrate very well.

Finance Colombia: Absolutely. As for people who want to subscribe to your publication, which is, as far as I know, the premiere English-language publication focused on gold and precious metals in the Andes, or for people who want to find out about future events, what are the best ways to communicate with you and your organization?

Paul Harris: The simplest and easiest way is probably to email me directly: [email protected]. And we can add you to the mailing list of the monthly Substack, and receive our other publications and announcements.

Finance Colombia: Great. Thanks a lot, it’s a privilege to always be here with you.

Paul Harris: Thank you very much. Appreciate your support, Loren.

NG Energy International Corp. (TSXV: GASX; OTCQX: GASXF) announced the initiation of natural gas production at its Sinu-9 site in Colombia, following authorization by the Colombian Ministry of Mines and Energy. The current output is reported at 8.3 million cubic feet per day (MMcf/d), with production projected to reach between 20.0 and 29.3 MMcf/d by year-end.

The Canadian energy company, focused on natural gas exploration and production, noted that Promigas S.A. E.S.P. has completed calibration of the Jobo connection point, enabling the commencement of gas sales. NG Energy completed drilling operations on the Brujo-1X well, which has three production zones, and began extracting from the lowest zone with a tubing head pressure (THP) of 1,750 PSI. Initial production outperformed previous drill stem test results, leading the company to aim for over 10 MMcf/d as production scales up with a wider choke. Production at Sinu-9 is expected to ramp up as additional zones of the Brujo-1X well and the Magico-1X well are activated. The company forecasts a gradual increase to approximately 29.3 MMcf/d by December. Sinu-9 has a long-term goal to become a significant contributor to Colombia’s natural gas supply.

Corporate Update and Financial Position

NG Energy also reported an increase to its line of credit facility with Macquarie Group by an additional US$12 million, raising the total to US$25.6 million. This funding will support the expansion of infrastructure at Sinu-9 and provide assurances to Colombia’s Agencia Nacional de Hidrocarburos as Phase II of the Sinu-9 development progresses.

In March 2024, Macquarie Group had already committed US$50 million in financing, part of a larger US$100 million credit facility. This recent increase in credit is designated for advancing the Sinu-9 project, including the construction of additional pipeline capacity, expected to increase by up to 76 MMcf/d over 15 months as outlined in a Memorandum of Understanding with INFRAES.

In connection with the credit facility, NG Energy will issue Macquarie 5,714,286 common share purchase warrants, allowing the purchase of one common share at C$0.98 until December 29, 2028. This issuance awaits approval from the TSX Venture Exchange. The announcement comes amid growing concerns about Colombia’s natural gas supply, as recent discussions on potential gas rationing highlight vulnerabilities in the country’s energy infrastructure. NG Energy’s production at Sinu-9 is expected to contribute significantly to the Colombian gas market, which has seen increasing demand pressures.

NG Energy specializes in the development of large-scale natural gas fields, primarily in Colombia. The company’s production goals aim to meet the country’s premium-priced gas demand, currently estimated at approximately US$8/MMBtu. With a target of reaching 200 MMcf/d, NG Energy projects substantial growth over the next few years, following a year-over-year increase in reserves across all categories (3P, 2P, and 1P). To date, over US$100 million has been invested in its Sinu-9 and Maria Conchita projects, with a substantial portion contributed by insiders holding roughly 32% of the company’s equity.

Photo courtesy Promigas