Falling price of gold worries the Colombian mining industry

Although most of the media’s attention has been focused on the Colombian oil industry as it weathers one of its toughest crises ever, the Colombian mining industry has also been severely affected by falling process. Santiago Ángel Urdinola, president of the Colombian Mining Association, told Semana that all of the mining companies would need to review their budgets and tighten their belts in order to remain profitable. The price of gold has plummeted from its 2010 high of $1,800 per ounce to almost $1,000 per ounce.

Urdinola warned, though, that the mining industry is even more worried about the problem of illegal mining than it is about falling prices. Just 12% of the gold produced in Colombia is mined by large mining companies; the rest comes from artisanal and illegal miners. It will be even harder for the Colombian government to push the industry towards formalization when the industry is already operating under such slim margins.

Continental Gold president León Teicher agrees with Urdinola’s analysis. He told El Espectador that, regardless of the price of gold, Colombia is not an attractive place to mine for gold because of the rampant problem of illegal mining. He called on the Colombian government to better regulate the gold mining industry in the country, which is currently rife with criminality and corruption.