Over the past decade, the Colombian military, backed by billions from Washington, has pushed back the Revolutionary Armed Forces of Colombia (FARC) guerrillas, who, alongside several splinter groups, for decades controlled nearly half of the country. Now, with much of its leadership erased by government bullets, FARC and other guerrillas control as little as 10% of Colombian territory, a situation that is making conditions far more difficult for the country’s infamous cocaine cartels.
But history has a way of sticking around. After almost 50 years of continuous violence driven by politics and drugs, historians describe Colombia as the world’s most enduringly violent country. The Colombian government has documented a total of 51,000 forced disappearances as of November, 2010. Although the homicide rate has been halved over the past decade, it remains among the world’s highest.
Against these backdrops, mining development—and the role of the scores of Canadian companies now active in this sector—is an increasingly sore issue. While the Santos government has identified mining development as a strategically crucial economic engine, it seldom acknowledges that thousands of small-scale mines employing hundreds of thousands of workers have long been mining the very same deposits that foreign corporations such as Gran Colombia now hope to exploit. “Marmato is a kind of prototype and should not be developed in this fashion,” says Jorge Robledo, an opposition senator who is fiercely critical of Santos’s strategy to attract Canadian mining companies and Canadian financing. “This is a situation of a sort that is triggering intense conflict and violence throughout the country.”
More conflict and violence is exactly what Colombia does not need if the ambitions of the government and Canadian companies are to be realized. This is as true in energy as it is in mining. With the fastest oil and gas production growth in the world, Colombia is now the sixth-largest producer in the Americas and the 24th-ranked producer in the world. The plethora of Canadian companies involved accounts for more than half of the production. They include such well-known names as Nexen and Talisman, as well as numerous Colombian companies that have TSX listings.
As oil has become more important to the country’s economy, it has become more important to FARC too. Attacks on oil infrastructure have increased in recent years even as the overall level of economic violence has diminished. Talisman had 23 of its subcontractors kidnapped by FARC last summer. They were released the next day, as the army closed in on the guerrillas.
Between 2002 and 2010, mining claims in Colombia boomed from 2.8 million acres to 21 million acres; about 40% of the country is now under consideration for mining projects. At least 20 Canadian-based names, including giant Barrick Gold and upstarts such as Batero Gold, are active in the country. Many of the companies that have won titles are structured like Gran Colombia Gold, which is part of a corporate group that also includes TSX-listed Pacific Rubiales Energy Corp., Colombia’s largest independent oil and gas producer. While the firms rely on access to capital from the Toronto stock market, management is firmly in the hands of impeccably connected local executives. Maria Consuelo Araujo, Gran Colombia’s president and CEO, served recently as Colombia’s foreign minister. The company’s board of directors includes Hernan Martinez, who was minister of mines and energy from 2006 to 2010. Mario Pacheco, whose family established Banco Colpatria in 1955, and who was until recently the bank’s investment director, is also on the Gran Colombia board. But the family is already big in gold: Pacheco interests include Mineros SA, Colombia’s largest gold producer.
At Gran Colombia’s modish offices in a corporate block in Bogota, CEO Araujo, a model of poise who asks visitors to call her “Consi,” says she views the Restrepo affair as a matter for the police to handle. Miguel de la Campa, who serves as executive co-chairman for both Gran Colombia and Pacific Rubiales, says the Marmato project will be a breakthrough both for the people of the village and the government of Colombia. “It’s a great deposit and it’s a great opportunity to create jobs and sustainable development,” he suggests as he reclines in jeans and plaid shirt on a leather couch beneath a wall checkered with gilt-framed antique maps of Colombia. “This is a town where mines have been operated dangerously for hundreds of years. It is totally contaminated and it is also geologically unstable. The town needs to be moved whether there is an open-pit development or not.” The opponents of the project, he suggests, harbour socialist, possibly even communist, convictions (as a Cuban, de la Campa would know, one supposes). “These NGO types are starting to make it very hard to get things done,” he fumes.