Colombia mining reforms test copper ambitions

Colombia’s mining industry faces a defining moment as the government advances reforms to align the sector with global critical mineral developments and the country’s green energy and environmental commitments under President Gustavo Petro, even as regulatory uncertainty, security risks and political change test investor confidence. 

Mining accounts for about 2.4% of Colombia’s GDP, but the industry contracted 6.2% last year as higher taxes, declining exploration and persistent insecurity in mineral-rich regions weighed on activity.

Despite those pressures, Colombia remains a major supplier of key minerals. The country is the world’s fifth-largest exporter of thermal coal, led by Glencore’s (LON: GLEN) Cerrejón mine in La Guajira, one of the world’s largest open-pit operations. 

Colombia is also the primary source of the world’s highest-quality emeralds, largely produced in the central department of Boyacá. 

Gold production remains significant in Antioquia, home to Aris Mining’s (TSX: ARIS) Segovia complex and Zijin Gold’s (HKG: 2899) Buriticá mine. CoreX Holding’s Cerro Matoso operation makes Colombia South America’s second-largest nickel producer after Brazil.

Yet much of the country’s geological potential remains underexplored. Only about 2.5% of Colombia’s territory, roughly 2.9 million hectares, is covered by mining titles, according to the National Mining Agency (ANM), and most concessions correspond to small- and medium-scale operations.

Copper goals

Like many countries positioning themselves to benefit from rising metal and minerals demand associated with the energy transition, Colombia is now seeking to add copper to its mining portfolio and seize a strategic opportunity to diversify the sector. 

In late 2025, the ANM launched tenders for 14 strategic copper regions, including prospective ground in Southern Colombia.

The initiative forms part of the 2024–2035 National Mining Development Plan, a 10-year roadmap that included an update to the country’s list of strategic minerals. Priority status now applies to 17 minerals including copper, nickel, zinc, platinum group metals, iron, manganese, metallurgical coal, phosphates, magnesium, bauxite, gold, emeralds and chromium.

Unlike its neighbours further south, copper production inside the country remains minimal. Colombia’s only significant producing copper mine is Atico Mining’s (OTCMKTS: ATCMF) El Roble operation, which produced 9.2 million pounds of copper last year, or a paltry 4,200 tonnes. 

That output is negligible compared with regional leaders Chile and Peru, which produced about 5.5 million tonnes and 2.7 million tonnes respectively last year.

Predictability and investment risk

Experts broadly agree that Colombia’s limited copper development reflects above-ground constraints rather than geological potential.

Estimates by the Colombian Mining Association (ACM) and government sources suggest the country could has about 9.7 million tonnes of copper resources, largely along the Andean metallogenic belt, though most deposits remain underexplored and undeveloped.

A small production base contrasts with a growing pipeline of projects, including AngloGold Ashanti’s (JSE: ANG)(NYSE: AU)(ASX: AGG) Quebradona, Cordoba Minerals’ (TSX-V: CDB) Alacrán, Libero Copper’s Mocoa, and Royal Road Minerals’ (TSX-V: RYR) Guintar-Aleman-Margaritas. The industry body says output could expand significantly if these developments come to fruition.

The broader mining sector, however, shows signs of strain. The industry generated about $16.1 billion in exports in 2025, or roughly 32% of Colombia’s total, but production declined sharply. The sector contracted 8.3% at year-end, with metallic minerals down 13.5%, reflecting weaker activity and policy headwinds.

Exports have also fallen for three consecutive years, dropping 5.1% in 2025 as lower domestic output weighed on shipments. Coal exports fell 20%, gold 18%, ferronickel 5% and emeralds 69%, while copper - albeit from a small base - rose 15%.

A report from the International Copper Study Group (ICSG) says the country must clarify the future of its mining code, concession terms and the role of a proposed state-owned mining company, EcoMinerales, before it can attract large-scale investment.

Copper mines typically take 15 to 20 years to move from discovery to production, making regulatory stability critical.

“Colombia could become a meaningful copper producer, but it will not happen on potential alone,” Juan Ignacio Guzman, head of mineral consulting firm GEM, said. “It requires at least one, preferably two, large-scale mines reaching construction and steady-state.”

Guzman said the main barrier remains execution risk, pointing to long permitting timelines and social challenges faced by projects such as AngloGold’s Quebradona.

Predictable timelines, stronger geoscience data, enabling infrastructure and improved security would all be necessary to build a viable copper pipeline, he said.

Eduardo Zamanillo and Marta Rivera, authors of Mining is Dead. Long Live Geopolitical Mining, echoed the assessment. They said copper development requires a long-term policy framework that extends beyond a single political cycle.

“Copper is a multi-decade investment that is extremely sensitive to timeline uncertainty,” they said. “Projects can survive rigorous environmental standards, but they cannot survive open-ended process risk.”

Policy uncertainty

Government reforms intended to strengthen environmental oversight have added another layer of uncertainty for investors.

Decree 044, enacted in January 2024, allows the Environment Ministry to declare temporary natural resource reserves in mining areas and suspend activities for up to 10 years to protect sensitive ecosystems such as páramos. These are wetland grasslands found at high elevations.

Regional authorities have also imposed restrictions. In Antioquia officials declared a temporary renewable natural resources zone covering six municipalities, suspending new mining permits for three years.

The policy debate escalated in October 2025 when the government introduced a draft Mining Law for a Just Energy Transition to replace the existing code. The proposal would create EcoMinerales as a state-owned mining company and prohibit new large-scale mining in the Amazon biome.

Fiscal policy has also tightened considerably. In December, Congress approved a tax reform that eliminates the ability for oil, gas and mining companies to deduct royalty payments from corporate income tax, effectively raising the sector’s tax burden and operating costs.

Under the revised regime, Colombia maintains an onerous base corporate tax rate of 35%, with additional surcharges tied to commodity prices. Oil producers can face total rates of up to 50% depending on international price levels, while coal companies may see rates rise to about 45%, according to PwC. The reforms also include a 5.4% self-withholding tax on exports.

Investor sentiment reflects the burdensome fiscal regime and the uncertainty surround environmental regulations, which are some of the strictest on the continent. In the Fraser Institute’s latest Annual Survey of Mining Companies, released in late February, Colombia ranked 42nd of 68 jurisdictions overall, but 57th on policy perception, placing it among the least attractive mining destinations in the region.

Security and illegal mining

Security challenges and illegal mining also remain major structural risks for the sector.

Rising gold prices have helped fuel illicit extraction across parts of Colombia and neighbouring Peru, often linked to organized crime and narcotics trafficking, a phenomenon often referred to as “narco-minería

Robert Munks, head of Americas at Global Risk Insight at Verisk Maplecroft, said violence tied to illegal mining will likely remain a major concern regardless of the election outcome.

“The failure of President Gustavo Petro’s ‘Total Peace’ policy means that violence will continue to be a concern for the mining sector under any future administration,” Munks said. “Colombia’s security challenges are deep-rooted, and the resulting violence is unlikely to abate quickly.

Illegal mining has become a significant driver of instability in recent years. “It now accounts for roughly three-quarters of Colombia’s gold exports,” Munks said. “Organized crime groups are moving into the sector because profits can exceed those from drug trafficking and the illegal origin of gold can be easier to disguise.”

The expansion of this so-called narco-mining nexus is raising costs and risks for companies operating in the country.

“Drug trafficking and illegal mining are increasingly merging into a narco-mining nexus that increases operational costs, compliance requirements and risk premiums for investors,” according to Munks.

Across the Amazon basin, Colombian criminal groups are working with Venezuelan networks in both illegal mining and drug trafficking, while near the Peruvian border dissidents from the former FARC guerrilla movement control parts of the supply chain,  according to journalist Dan Collyns’ forthcoming book Blood Gold: The Shocking True Story of the Amazon Gold Rush. 

The ICSG’s Regulatory Survey 2026 warns that informal gold mining will likely remain dominant while prices stay elevated unless Colombia addresses institutional, financial and capacity barriers to formalization.

The government has begun purchasing gold directly from small-scale miners in an effort to formalize the sector and disrupt criminal supply chains.

Companies are also pursuing private initiatives. Aris Mining has signed formalization agreements with artisanal miners around the Segovia district to integrate informal workers into legal supply chains.

“Illicit production is likely to remain substantial unless formalization comes with tangible economic upside,” Guzman said.

Election test

Taken together, entrenched illegal mining and an uncertain political transition (further complicated by the results of recent legislative elections) present a significant barrier to companies looking to invest in Colombia.

The outcome of the May 31 presidential election - and the policy direction that follows - will determine whether Colombia can tighten control over illicit activity in the sector, stabilize regulation and unlock long-term investment, or remain constrained by security challenges, fragmented governance and regulatory risks.

Eduardo Ruiz, an analyst at Control Risks in Bogota, said the election could significantly influence mining and energy policy.

“The election will likely revolve around two contrasting policy visions - one broadly aligned with the current government’s energy transition agenda and another favouring a more investment-friendly regulatory environment,” Ruiz said.

If a left-leaning candidate aligned with the current administration, such as Iván Cepeda, prevails, government policy would likely continue to develop with these priorities in mind according to Ruiz.

By contrast, a centre-right administration led by candidates such as Paloma Valencia or Abelardo de la Espriella would likely seek to restore investor confidence by streamlining regulations to promote exploration.

Munks said the next president will likely face a divided Congress, raising the risk of continued political friction.

If no candidate wins more than 50% on May 31, a runoff between the top two contenders is expected in June.

Early polls show de la Espriella leading, followed by Cepeda.

“From an investor standpoint, the key is not only who wins, but whether the next president can build a governing coalition that delivers regulatory stability,” Guzman said.

Strategic outlook

For now, Colombia presents a paradox. The country holds substantial reserves of coal, gold, nickel and prospective copper at a time of strong global demand for energy-transition minerals.

Major international companies including Glencore (LON: GLEN), Rio Tinto (ASX, LON: RIO) and AngloGold Ashanti (NYSE: AU) already operate or are exploring in the country.

Yet regulatory reform, environmental restrictions, security challenges and political uncertainty have tempered foreign investment and slowed project development.

“Colombia’s competitive lever is not only the tax stack but a credibility package,” Guzman said. “Stable rules, clear environmental-ordering criteria, enforceable timelines and transparent community benefit mechanisms are what ultimately reduce social conflict risk and attract long-term capital.”

Zamanillo and Rivera said the country’s long-term position will also depend on how it navigates intensifying geopolitical competition for critical minerals.

“It is no longer only about having resources in the ground,” they said. “It is about being able to deliver predictable supply through stable institutions, clear permitting, credible standards and durable territorial governance.”

If Colombia can establish predictable rules that survive electoral cycles, they said, it could position itself as a strategic supplier of minerals critical to global energy-transition supply chains.