Colombia advances moves to end coal production

The Colombian government has identified areas in thermal coal rich parts of the Cesar and La Guajira provinces as special mining districts where coal production may eventually be replaced with operations meant to aid the transition to cleaner energy sources, deputy minister of mines Johana Rocha said on 12 September.

The country has selected five areas in Cesar and three areas in La Guajira to be subject to Colombian president Gustavo Petro's decree issued on 2 August to create 16 special mining districts for diversifying production. The districts that have been selected include areas where Drummond, Cerrejon and CNR have coal mining operations and where Glencore subsidiary Prodeco used to mine.

Anticipating the downturn in international coal demand, the Petro administration is looking at how to convert mining areas to other uses. Cesar and La Guajira also have the ability to be used for producing renewable energy, tourism and production of other minerals in high need such as silicon and agriculture, Rocha said.

The Ministry of Mines will soon declare some of the areas as strategic mining areas that will be auctioned before the end of Petro's term in August 2026, Rocha said. The areas contain high grades of ferro silicon and polysilicon needed for production of solar panels and microchips. The ministry has held 20 separate meetings with local people in Cesar province.

But Colombia will not convert the special mining districts until existing lease agreements with producers expire, Rocha said.

"We want these coal licenses to continue operating under the contractual terms that they have. In the meantime, we will look at how we can supplement other income for those territories that have a high dependence on coal," Rocha said.

Colombia's policy also could change under future presidential administrations.

Drummond's El Descanso coal concessions expire in 2032. The company's La Loma lease ends in 2039.

Drummond Colombia president Jose Miguel Linares told Argus two weeks ago that the company is interested in extending the El Descanso coal project for an additional 30 years. The company's three mines in Colombia have measured coal reserves that exceed 2bn metric tonnes.

On the other hand, Glencore has laid out plans to progressively close Cerrejon by the time current mining concessions expire in 2034.

Colombia's coal production could end by 2040 under a scenario of a gradual energy transition, Alvaro Pardo, the director of the Colombian mining agency, ANM recently said.

By Diana Delgado