The Bank of the Republic of Colombia just made a shocking decision by lowering interest rates by only 50 bps to 10.25%. The consensus expectation was 75 bps, with hopes set at 1%. This is quite a pathetic decision and potentially reflects the fact that many observers feel the committee has become politically tainted, as the majority of its members were appointed under the Duque administration.

One hopes that is not the case, as Colombia prides itself on institutional independence. However, there is no justification for such a weak decision, given that inflation fell more than expected in August to 6.1% (5.5% core), and the Central Bank hasn’t met since the end of July.

A shockingly poor message for the markets and the economy at a time when there are signs of economic recovery and 2024 GDP estimates are being raised by everyone.

Poor from Villar and his team.

The Ministry of Mines and Energy of Colombia confirmed last week a historic gas discovery by the Colombian state-controled petroleum company Ecopetrol and Brazilian firm Petrobras  in its Sirius project.

According to the current Minister of Mines and Energy, Andrés Camacho Morales, “it is a discovery that the country hasn’t seen in 45 years; it’s a historic find, and it will mean a significant backup reserve for the country.”

The well is located in the Tayrona Block, approximately 31km off the coast, and will be operated by Petrobras, which holds a 44.44% stake, while Ecopetrol owns 55.56% of the project.

According to the Presidency of the Republic of Colombia, Petrobras’ initial estimates indicate that production from the Sirius well will begin between 2029 and 2030 with four production wells and an expected output of 13.3 million cubic meters per day over ten years. In the second stage, which would start in 2031, one or two production wells would be added, with a production rate of 15 million cubic meters per day.

An important reserve, but it does not solve gas problems

In September of this year, Colombia’s nine most important energy associations called for measures to be adopted to ensure that the country does not run out of energy in the next two years. In this statement, the associations highlighted the following:

Situation in the Electric Sector

• According to experts in the sector and the Mining and Energy Planning Unit (UPME) itself, by 2026 there would not be enough firm energy supply to cover the entire demand, and from December 2028, if El Niño or droughts occur, there would be energy rationing.
• According to a report by XM, reservoirs reached critical levels in April (below 30%), and there is a risk of hydroelectric energy shortages between December 2024 and January 2025.
• As of today, the system’s usable reservoir level, according to XM, is at 50.19%, a figure below historical averages for this period and 1.1 percentage points below the shortage path.
• Regulatory uncertainty, slow project rollouts, and growing energy consumption demand immediate actions to avoid future energy crises.

Situation in the Gas Sector

• Natural gas is a key contributor to the quality of life for Colombians, with 36 million Colombians having natural gas in their homes today, 84% of whom are families from social strata 1, 2, and 3 (low-to moderate income households).
• Natural gas vehicles (NGV) not only reduce pollutant gas emissions but also lower costs for the transport sector: 87,000 taxi drivers and 1,400 transport operators switched to NGV, as well as public mass transit systems that run on this energy source (100% of the fleet in Cartagena and Valledupar and 30% of the SITP-public feeder buses-in Bogotá). These users depend on the availability of natural gas in their daily lives.
• The most widely used energy source by industries is natural gas, representing 32% of the total energy used by this sector. It is essential in the production of food, glass, oxygen, cement, paper, fats, chemicals, salt, packaging, ceramics, appliances, and more. The lack of natural gas will lead many industries to revert to consuming higher-emission fuels, to plant closures like those producing fertilizers—strategic for the country’s food security—or to the elimination of high-value-added product lines, resulting in employment and inflation consequences.
• The electricity market operator XM identified a significant need for thermal generation, especially natural gas, due to low hydroelectric potential in its latest analysis of the energy landscape.

In a recent statement made by Ecopetrol, the company reached the Cenit-Promigas agreement to ensure gas supply in Colombia.

Above photo: Gas well Orca Norte -1. provided by Ecopetrol

The Colombian legal sector has seen the formation of a new business group, Godoy Holdings, which merges two prominent law firms in the country: Godoy Córdoba, specializing in labor law, and GodoyHoyos, a tax law expert. Godoy Córdoba has a track record of over 36 years, operating in Colombia, Ecuador, and Peru, while GodoyHoyos has been active for more than 20 years in the Colombian legal industry.

Juan Pablo Godoy is managing partner of the firm, managing partner of the foreign trade and energy and natural resources practices, as well as a partner in the tax law practice.

Godoy Holdings aims to centralize management across the legal entities under its umbrella, including Godoy Córdoba, GodoyHoyos, and their associated companies in Ecuador and Peru. This structure is intended to align all entities under a single business vision and strategy. The group seeks to enhance efficiency and streamline its operations, with a goal of strengthening its position in the Colombian legal market and the broader Andean region.

Though the firms will continue to offer their services independently, principals say their integration into a shared business ecosystem is expected to improve their capacity to provide comprehensive legal solutions tailored to client needs. The offices of both firms in Bogotá, Medellín, Cali, and Barranquilla will continue regular operations.

Godoy Holdings, following the integration, becomes the fifth-largest legal group by revenue in Colombia’s legal market as of December 31, 2023.

About Godoy Córdoba

Godoy Córdoba is a labor law firm with 36 years in the market. It ranks as the sixth-largest legal firm in Colombia by revenue and has been ranked in Band 1 by Chambers & Partners for 15 consecutive years. The firm operates regionally in Ecuador and Peru, with over 250 professionals. Its services also include immigration, tax, and commercial law.

About GodoyHoyos

GodoyHoyos specializes in tax law and has been ranked in Band 1 by Chambers & Partners for 14 consecutive years. The firm has more than 20 years of experience and operates with a team of over 50 professionals. In addition to tax law, its practice areas include litigation, arbitration, corporate law, competition, energy, natural resources, administrative and infrastructure law, and customs and foreign trade.

Andrés Godoy (headline photo) is managing partner of Godoy Córdoba, director of the firm’s immigration practice and its training unit.

At last month’s ANDICOM 2024 technology industry event held in Cartagena, Colombia, the organizing entity CINTEL, along with industry stakeholders, introduced the “Manifesto for Gender Equity and Inclusion in STEM,” aimed at addressing gender gaps and promoting women’s involvement in science, technology, engineering, and mathematics (STEM). Despite women constituting roughly 50% of the population, their representation in STEM fields remains disproportionately low, particularly in Latin America.

For more information, visit ANDICOM and CINTEL.

The manifesto focuses on education, creating opportunities, professional equity, and anti-discrimination measures. It also promotes mentoring programs, female entrepreneurship, and inclusive policies. Finalization of the manifesto is expected in early October.

Held in Cartagena, Colombia, from September 4 to 6, ANDICOM 2024 brought together 6,000 participants from more than 35 countries, including 2,000 business delegates and over 150 international speakers across 110 academic sessions.

STEM means “Science, Technology, Engineering and Mathematics” careers.

Frontera Energy Corporation (TSX: FEC) has announced an amendment to its substantial issuer bid, removing the preferential treatment for “odd lot” tenders from shareholders holding fewer than 100 shares. The adjustment ensures all shareholders are treated equally, regardless of the number of shares held. No additional changes have been made to the terms or timing of the offer, which remains open until October 17, 2024.

The amendment affects shareholders who previously submitted odd lot tenders, requiring them to resubmit using updated forms.

Further details can be found in the Issuer Bid Circular. For assistance with the offer, shareholders can contact Computershare Investor Services Inc. Frontera is a Canadian oil and gas company with operations across South America, including 22 exploration and production blocks in Colombia, Ecuador, and Guyana. For more information, visit Frontera Energy.

Abuve image:LNG Floating Storage Unit from CNW Group/Pacific Rubiales Energy Corp. – predecessor entity to Frontera Energy

Colombia’s agricultural and agro-industrial sector experienced a drop in imports for July 2024, totaling USD $648 million CIF. This represents a 7.4% decrease compared to the same month in 2023. The reduction is largely due to declines in key imports such as corn (-45.4%), soybean meal (-34.7%), and wheat (-37.3%).

From January to July 2024, total imports reached USD 5.31 billion, a 6.1% decrease compared to 2023. Significant reductions were seen in corn (-23.4%) and soybean meal (-27.2%). The sector’s total import volume for July also fell by 13.2%, reaching 896,751 tons, with corn and wheat leading the decline.

Dora Inés Rey, director of the Unidad de Planificación Rural Agropecuaria (UPRA), defended the numbers and her administration, saying that the reduction in import value reflects increased efficiency in local production chains and the implementation of policies promoting domestic consumption of agricultural products.

However, from January to July 2024, there was a 7% rise in import volume, reaching 8.63 million tons, driven by increases in corn (7.8%), ethanol (162.8%), and wheat (12.4%).

In terms of the trade balance, Colombia posted a value surplus of USD 1.6 billion FOB between January and July 2024, a 105.1% increase from the previous year. Despite this, the country recorded a volume deficit of 5.26 million tons, a 1.7% increase over the same period in 2023.

For more details, visit the MinAgricultura website.

Above image of Colombia’s signature chicken and potato soup called Ajiaco by Loren Moss

inDrive, a global mobility and urban services platform that already usurps Über in many markets around the world, has introduced inDrive Money, its first financial product in Colombia. The service aims to improve financial inclusion for drivers using its platform and is being launched in partnership with R2, a Latin American fintech specializing in financing for small and medium-sized businesses.

The service is available in 17 cities across Colombia and offers income-based financing to drivers. Loans of up to COP 1,000,000 (approximately USD 240) are available, with repayment terms ranging from three to five months, depending on driver activity on the inDrive app. The loan system is fully integrated into the app, allowing drivers to apply for loans, check balances, and manage repayments directly. Repayments are automatically deducted alongside the commission that inDrive takes for each ride, providing a streamlined solution for drivers to handle their finances without disrupting their usual app activities.

Unlike platforms such as Über & Lyft, InDrive allows the passenger to name his/her own price. Drivers also keep more of what they earn.

inDrive Money first launched in Mexico in February 2024 as part of inDrive’s broader strategy to offer financial services to gig economy workers, a group often underserved by traditional financial institutions. The initiative aligns with the company’s mission to address social inequities by offering more inclusive financial options.

Alina Zavorokhina, Head of Business and Product at inDrive Money, emphasized the mutual trust between the platform and its drivers. “inDrive Money gives drivers the opportunity to access loans directly through our app, helping them invest in their work or improve their financial well-being,” she said, highlighting the collaboration with R2.

R2 Co-Founder and CEO Roger Larach commented on the partnership’s expansion to Colombia, following its success in Mexico. “Our integrated solution allows drivers to access capital quickly and efficiently, supporting financial inclusion throughout the country,” Larach said. R2’s approach evaluates drivers based on their activity on the inDrive platform rather than relying on traditional credit histories.

A recent survey of inDrive drivers indicated that 72% would recommend inDrive Money to colleagues. The primary reasons for taking out loans were vehicle maintenance (32%) and covering personal expenses (28%). Drivers noted the transparency and convenience of managing loans directly through the app as key benefits.

For more information about inDrive Money, visit money.indrive.com.

About inDrive
inDrive is a global platform offering mobility and urban services, with over 240 million downloads. Operating in 779 cities across 46 countries, inDrive provides services ranging from ride-hailing to freight delivery and intercity transportation. The company is committed to challenging social injustices through its business practices and community programs. For more information, visit www.inDrive.com.

About R2
Founded in 2020, R2 is a fintech firm focused on enabling technology platforms to provide financing to small and medium businesses. It works with leading companies across Latin America and is backed by several investment firms. More details can be found at r2.co.

Image provided by InDrive.

Illegal bus races the night of September 15 sparked outrage in Medellín after a public video showed two public service vehicles turning the streets of the Naranjal neighborhood, near the Makro, Jumbo and Homecenter stores at the intersection of Ave. San Juan and 65th Avenue, into a racetrack.

Local authorities activated the Medellín Emergency and Security System (SIESM in Spanish) to identify the two vehicles and track them using LPR (license plate recognition) cameras. Thanks to these efforts, one of the drivers was located, not only to sanction him, but also to impound his bus.One of the buses is affiliated with the company Conducciones América S.A., with a route to the Cristóbal neighborhood, while the other is from the special services company Rutas Verde y Blanco. They were competing in a short stretch of less than 1 kilometer.

The US Embassy has issued an advisory saying that Pro-Palestinian demonstrations are expected to take place on October 7, 2024 across Colombia.  The demonstration in Bogota is expected to take place in front of the U.S. Embassy beginning at 10:00am. Additional protests may occur in other areas and cities throughout the day, including Cali, Medellín, Bucaramanga and Manizales.

This demonstration may affect gate and street access to the Embassy.

Actions for foreign individuals to take, according to the US State Department:

• Avoid demonstrations
• Exercise caution if you are coming to the Embassy
• Stay alert
• Be aware of your surroundings and belongings
• Monitor local media for updates

Assistance for US citizens:

U.S. Embassy Bogota, Colombia
Tel. +57-1-275-2000 or 601-275-2000
[email protected]
https://co.usembassy.gov/

U.S. Consular Agency, Barranquilla
[email protected]

U.S. Department of State – Consular Affairs
1-888-407-4747 or 1-202-501-4444
Colombia Country Information

Enroll in Smart Traveler Enrollment Program (STEP) to receive security updates

Follow the embassy on Facebook and Twitter/X

Collective Mining Ltd. (NYSE: CNL, TSX: CNL) has announced new metallurgical test results from its Apollo system at the Guayabales Project in Caldas, Colombia. The cyanidation tests, conducted on samples from both shallow and deeper parts of the Apollo deposit, have produced an average gold recovery rate of 94.3%. The tests confirm earlier gold recovery data released in 2023 and show improvements in metal recoveries from the copper-poor mineralization.

The company’s ongoing test work also included optimization efforts on flotation concentrate, which demonstrated increased recovery rates for both gold and silver compared to previous test results.

Key Findings

Seven samples from the Apollo system, each representing copper-poor sulfide material, were tested through cyanidation at SGS Lima in Peru. These samples yielded an average gold recovery of 94.3% and silver recovery of 63.7%, across grades that averaged 1.0 grams per ton (g/t) for gold and 11.7 g/t for silver. These tests corroborated earlier findings and confirmed that gold dissolution is achievable across a broad grade range.

Additional testing on copper-rich mineralization showed overall recoveries of 89.4% for gold and 85.2% for silver, with copper recovery remaining high at 94.4%. These figures represent a 5% improvement in gold recovery and a 3% improvement in silver recovery compared to prior tests conducted in April 2024.

Processing and Exploration Activities

Collective Mining envisions processing the Apollo material using a conventional split circuit, with copper-rich material processed through flotation and copper-poor material treated via cyanidation. The company is also considering incorporating a gravity circuit to recover tungsten, which is present in high-grade concentrations at Apollo.

Currently, the company is operating five diamond drill rigs as part of its 40,000-meter 2024 drilling program. Two rigs are actively drilling at Apollo, while others are deployed at the Trap system and Plutus target.

Outlook

The latest metallurgical results will assist in optimizing the design and conditions for cyanidation and flotation processes at Apollo, enhancing Collective Mining’s understanding of the potential for high recoveries of gold, silver, copper, and tungsten. This ongoing exploration and test work support the company’s plans for expanding its mining operations in Caldas.

For further details on the company’s exploration progress and technical information, visit Collective Mining’s website.