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THE NATIONAL AGENCY OF MINING IS THE POINT OF ENTRY FOR COMPANIES CONDUCTING MINING BUSINESS IN COLOMBIA

THE NATIONAL AGENCY OF MINING IS THE POINT OF ENTRY FOR COMPANIES CONDUCTING MINING BUSINESS IN COLOMBIA. Maria Constanza Garcia President. March 2013. STRONGER AND CLEARER ORGANIZATIONS: Structure of the Mining sector. National Agency of Mining. Mining Authority.

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THE NATIONAL AGENCY OF MINING IS THE POINT OF ENTRY FOR COMPANIES CONDUCTING MINING BUSINESS IN COLOMBIA

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  1. THE NATIONAL AGENCY OF MINING IS THE POINT OF ENTRY FOR COMPANIES CONDUCTING MINING BUSINESS IN COLOMBIA Maria Constanza Garcia President March 2013

  2. STRONGER AND CLEARER ORGANIZATIONS: Structure of theMining sector National Agency of Mining MiningAuthority Minister of Mining and Energy Colombian Geological Service SubsurfaceKnowledge DeputyMinister of Energy DeputyMinister of Mining Mining and EnergyPlanningUnit MonitoringMarkets & Sector Planning Entitieswithspecificfunctions

  3. ORGANIZATIONAL STRUCTURE OF NAM MiningAuthority Board Office of Technology and Information President Vice President of Administration and Finance Legal Office InternalControlsOffice Vice President of Contracting and Titles Vice President of Monitoring, Control and Mine Safety Vice President of Promotion and Development Management of Mine Security and Rescue issues Management of Small and Medium Scale Mining Registry Management Management ofMonitoringand Control Promotion Management Management of MiningTitles Royalty Collection Management

  4. MAIN FUNCTIONS Article. 4 Decree 4134/2011

  5. OPPORTUNITIES IN COLOMBIA Colombia is a destination for investment Top destinationsforexplorationinvestment 25% of the global exploration budget Countries that attract   investment in the mining sector Source: (Graph1) CorporateExplorationStrategies 2012, EconomicMetalsGroup- MEG. (Graph 2) Survey of miningcompanies2011/2012 (25 countries) bythe BehreDolbearGroup.

  6. OPPORTUNITIES IN COLOMBIAThere are 50 new investment projects in 13 reigons +5,9% Coal Production Source: National Bureau of Statistics - DANE. Mining and Energy Planning Unit-UPME. Ministry of Mines and Energy.

  7. OPPORTUNITIES IN COLOMBIAMineral Production 2012 Regional Coal Production SilverProduction Gold Production Nickel Production

  8. OPPORTUNITIES IN COLOMBIAWe are ranked in the top 10 for worldwide producers and exporters of coal The Mining sector has provided a significant source of economic growth for the Colombian economy Source: http://www.worldcoal.org/resources/coal-statistics/.

  9. What are wedoing? • ComprehensiveAudit • Safety and Rescue • ApplicationsBacklogProcessed • Promotion and Development • StrategicMiningAreas CONTENT

  10. COMPREHENSIVE AUDITNew Approach Comprehensive Audit of all 9,500 mining titles • ByMarch 1: • 1,759 reviewsof existingcontractsforcompliancewithconditions • 438 fieldinspections • 330 comprehensiveauditreports CAD$191 M SupportActivitiesof ComprehensiveAudit Group 1: HMV Engineers - GENIVAR Colombia Group 2: Bureau VeritasColombia,-Tecnicontrol and BVQI • 4* annualvisitstotitles in thedevelopmentstage • 2annualvisitstotitles in theexplorationstage • 1,400** comprehensiveauditreportsper month • 100%of miningtitlesfullyauditedthisyear • 2%of royalties assigned to review process costs • Up to 4 • ** more than1,400 reports

  11. SAFETY AND RESCUEAllemergenciesattended Promote a culture of accident prevention Rescue workers (National Mining Rescue) Contract awarded to purchase lifesaving equipment (breathing apparatus) Emergenciesattended Accident prevention visits to mine title holders 850 CAD$5.6 million 101 564

  12. What are wedoing? • ComprehensiveAudit • ApplicationsBacklogProcessed • Promotion and Development • StrategicMiningAreas CONTENT

  13. APPLICATIONS BACKLOG PROCESSED19,629 MiningApplicationRequests 19,629 requests evaluated by mid year • ByMarch 1: • 11,361 Requestsevaluated (58%) • 977 titlesgranted • Processed all applications for temporary licenses • Re-open applicationssystem • New registrationinformationsystem • MigrategeographicinformationsystemtoMagna – SIRGAS • Evaluatelocationsavailablefor new miningactivities

  14. What are wedoing? • ComprehensiveAudit • ApplicationsBacklogProcessed • Promotion and Development • StrategicMiningAreas CONTENT

  15. PROMOTION OF SMALL AND MEDIUM SCALE MINING Legalization of traditional mining activities and technical support to SMEs • 52 signed contracts for legalization of traditional mining activities since June 2012 • (Antioquia, Boyacá, Caldas, Caquetá, Cundinamarca, Guajira, Meta, Santander, Sucre and Tolima) • Supportsessionsfor legal transitionto formal economy (Boyacá, Antioquia, Córdoba, Cundinamarca and Huila) • Support forums for provision of additional training: Guainía, Cauca, Vaupés, Vichada and Putumayo

  16. TRANSPARENCY AND CERTAINTY New scheme to contract extensions • Cerro Matoso S.A • Paz del Río Mining S.A. (Iron & Coal) • Comprehensive approach: social, environmental, economic and legal New Agreement with Paz del Río Mining totals CAD$7.3 bn Cerro Matoso shows the way for new mining contracts Cerro Matosochanged the way to negotiate contracts Coal Agreement with Paz del Río (Votorantim) total value of CAD$7.3 bn

  17. What are wedoing? • ComprehensiveAudit • ApplicationsBacklogProcessed • Promotion and Development • StrategicMiningAreas CONTENT

  18. STRATEGIC MINING AREAS (SMA): Background Encourage the exploration and development of mineral resources, fulfilling international, social and environmental standards Strategic Mining Areas (SMA) contracts awarded through a competitive process which seeks greater total benefits through increased investment and production.

  19. STRATEGIC MINING AREAS (SMA): Stages 2014 Semester 1 2013 Semester 2 2013

  20. STRATEGIC MINING AREAS (SMA): Scope • 1st Competitive Process of SMA

  21. STRATEGIC MINING AREAS (SMA): Inter-Agency Coordination Scheme Single channel communication under the liaison model Formal and informal relations to facilitate routine inter-agency cooperation Joint training to foster understanding of each agency’s role Mechanisms for sharing data Common language and unified messages Environmental and social assessments Technical input for the Competitive Process

  22. Thankyou

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