How attractive is Colombia for mining investment compared to other countries in the region?

RIO DE JANEIRO, BRAZIL – Colombia lost territory on the index of the world’s most attractive countries for mining investment last year, scoring 70.03 out of 100 points, dropping from 28th in 2020 to 29th in 2021, according to a report by the Fraser Institute.

Colombia ranks 29th in the Investment Attractiveness Index, compiled by the independent, nonpartisan Canadian think tank, which takes into account government policies that attract or deter investors in the mining sector.

Read also: Check out our coverage on Colombia

According to the Fraser Institute, this year’s report includes a ranking of 84 countries around the world – 77 were assessed in 2020 – based not only on these policies, but also on their geological attractiveness (minerals and metals).

Despite the slight drop in score, Colombia is second in Latin America behind Ecuador, which ranks 24th in the world with a score of 72.79, well above the 2020 score of 57.95.

In Latin America and the Caribbean, Ecuador and Colombia are followed by Chile (69.33), Mexico (66.46), Peru (61.64), Brazil (56.20), Guyana (44.24) and Bolivia (42.92), among others.

As part of this report, the Fraser Institute also released the results of its Policy Perception Index, which rates each country’s mining policies and their attractiveness from the public’s perspective.

In short, it “captures the views of managers and executives about the impact of policies in jurisdictions with which they are familiar,” it explains.

Colombia did not do very well in this section, ranking 51st out of 84 evaluated, with a score of 62.57, a decline from the 2020 score, when it was 64.83.

Nevertheless, Colombia ranked third in Latin America and the Caribbean, behind Chile, which ranked first with a score of 68.86, and Ecuador, which ranked second in the region with a score of 66.06.

In the Best Practices Mineral Potential Index, which ranks countries in the region according to their geological characteristics that “encourage” or “do not discourage” investment in exploration, Colombia achieved its best result, ranking 18th.

The country was second in Latin America on this score behind Ecuador, which ranked 13th in the world with a score of 77.27.

The Colombian Mining Association (ACM) predicted last February that mining GDP growth in 2021 will increase by more than 10% compared to 2020, after falling 27% due to the pandemic.

In fact, mining production in Colombia could increase 10% by 2022 as global demand for coal increases due to economic recovery, high gas prices and geopolitical dynamics in Europe.

Last year, the South American country maintained its share of global momentum with 1.1% of mining investment compared to 2020.

“The increase in the investment budget for Colombia was 37% compared to 2020, similar to the growth of global dynamics, reaching a value of US$131 million, the highest in the last six years,” the association said.

With information from Bloomberg