Presentation - Mining as an Engine for Prosperity in Colombia Henry Medina - Vice Minister of Mines

1. Mining as an engine for prosperity in
COLOMBIA
Henry Medina
Vice Minister of Mines

2. Mining sector in Colombia plays a significant role
In 2011 22% of exports came from
mining sector
ROYALTIES & TAXES
In 2011 royalties grew 34%
Source: Colombia Geological Service for Mining
National Hydrocarbons Agency
DIAN

3. Coal example - Growth is possible
COAL PRODUCTION MTn COAL PROJECTS
Cerrejón
La Loma
El Descanso
Calenturitas
La Francia
Interamerican
Coal
Centromin
Paz del Río
MILPA
Carbocoque
Production 85.8 MTn (2011), Increase 15,4%
Uniminas
Reserves 6,900 MTn
Ranking 6th exporter and 10th producer in the world
Characteristics Thermal coal: 96%
Metallurgic coal: 4%
Thermal capacity 10,000 - 12,000 BTU
Growth levers • Expansions and new projects
• Adequacy of infrastructure system
• Environmental licensing and social support
• sustained security
Source: Colombian Geological Service

4. We are making strategical decisions
POLICIES INSTITUTIONS REGULATION
 Organise the mining  Vice Ministry of Mines
sector  Private – Public
 Colombian Geological Alliances Law
 Grow the mining sector Service
 Strategical Minerals
 National Agency of
 Mining formalization Mining  Strategical Areas
 Ilegal mining eradication  National Agency of  Mining Code Reform
Infraestructure
 Safety & Health technical
formation  National Agency of
Environmental Licenses
2010 - 2014

5. We are making changes to become minning leaders
FROM TO
 Suboptimal and disorganised use of mining  Strong National Agency of Mining
resource
 Lack of knowledge of colombian mining  Ingeominas into focused Colombian
potencial Geological Service
 Incomplete and weak cadastre  New Web readicator, and modern
arquitecture with World Bank advisory
 Deficient government oversight of mining  Earmarked resources for strong fiscalization
activity process & formalization program
 No clear line of sight of major projects from  Specialized Projects of National Interest
early stages (PIN) Unit
 No clear governmental entity to promote
artisanal and small scale mining  New Vice Ministry of Mines with 2
Directorates
 No formal inter-institutional coordination

6. We have defined strategical minerals
 Cooper
 Iron
 Uranium
 Niobium & Tantalum (Coltan)
 Potassium Minerals
 Thermal & Metalurgical Coal
 Gold
 Platinum
 Magnesium Minerals
 Phosphate Minerals

7. We have defined Strategical Mining Areas
Mining Strategical Areas
2, 9 millon Has
2,53% of National Territory
Mining titles - 9.133
5,05 millon Has
4,42% of National Territory
Source: Colombian Geological Service

8. We can grow in other areas
GOLD Tn GOLD & SILVER AREAS / PROVINCES
Antioquia
Bolívar
Caldas
Cauca
Cesar
Chocó
Huila
Nariño
SILVER Tn
Tolima
Risaralda
Putumayo
Valle del Cauca
Norte de Santander
LISTED TMX FIRM PROJECTS
Resources Measured & Resources Measured & Indicated,
Indicated, Inferred Au Moz Inferred Ag Moz Strategical Areas 2.9 m ha
31.4 90.1 Gold and Silver 2.3 m ha
Source: Colombian Geological Service

9. Strategic Mining - Award Rounds
Preliminary
PREPARATION LAUNCH EVALUATION AWARD
• Preliminary • Lauching Session • Admission and • Award
identification of evaluation of
Blocks • Sale of Data Packages preliminary proposals • Signing of
agreements
• Strategic • Road Shows • Publication of the
environmental and Participants List
social planning • Call for Preliminary
Proposals • Deposit of Proposals -
• Final demarcation of Public Session
Blocks
• Evaluation of Final
• Elaboration of Data Proposals
Packages
CRITERIA OPTIONS (WIP)
• Exploration Track Record
2012 and activity commitments
• Level of state partnership
Ronda 2013

10. We are working on infraestructure projects
RAIL ROADS
O. ATLANTICO
Santa Marta
Dibulla
Chiriguaná
La Mata
Capulco
Cúcuta
Bucaramang
20 million tn with Carare Train Major Project will be key for evacuation of a
Barrancaber
Cupica B.del La Vizcaína
minerals from the interior Carare
Pto. Berrío
meja
P.Araújo
Medel Pto. Boyacá
O. PACÍFICO
Bolombolo Vélez Duitama
lín
Puerto Chiquinquirá
La Felisa Salgar La
Isla
Cartago Bogotá
La Tebaida
Ibagué
Buenaventur
a
Cisne Cerrito
ros Cali
Source: Ministry of Mines and Energy
2 Major rail road projects with access to Atlantic
Actual
Rail Road Distance Required Capacity
Capacity
FENOCO 245 kms Line 1 Lines 1 -2
Chiriguaná – Santa Marta 45 mill tn year 90 mil tn year
CERREJÓN 150 Kms 70 mll tn year 150 mil tn year
Barrancas – Puerto Bolívar

11. We are working on infraestructure projects
COAL PORTS
13 ports in 5 provinces La Guajira, Magdalena,
Atlántico, Bolívar and Valle with access to Atlantic
Sea
Today Ports capacity is around 90 million tn
If we want to export Needed Capacity
115 mll tn 138 mill tn
3 Major Projects Puerto Brisa - Puerto Drummond – Puerto
Nuevo
Colombia exports by ports around 92% of main
production of Coal (80 million tn) that
represents $1.3 billon pesos to economy
Source: Ministry of Mines and Energy

12. And creating appropriate security conditions
Attacks against infrastructure
Security improvements in recent
years have also benefited the oil
and mining sector
Ilegal Armed Groups Attacks
Source: Ministry of Defense

13. We are partners and allies
Companies Listed on TSX with mining
50 properties in Colombia
No. Companies
30
40
28
10
-10 Dic. 2010 Dic. 2011
During last ten years Canadian companies
have been working in Colombian projects
We expected new investors to work with us
81 Projects
Source: www.tmx.com, 24th february 2012 - MME

14. It will be posible to achieve goals and results
COOPER AREAS/PROVINCES
4,000 3,800
3,697
3,410 3,502 COOPER - Tn
3,500
3,136 Antioquia
2,908
3,000 Caldas
Cauca
2,500 2,275 Cesar
2,099
Chocó
2,000
1,678
1,567 Huila
1,500 1,328 La Guajira
1,161 Nariño
1,000 Norte de
Santander
500 Putumayo
Quindío
0
Risaralda
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Tolima
Valle del Cauca
LISTED TMX FIRM PROJECTS
Resources Measured & Indicated Cu MLb
765,5
Strategical Areas- 2.900 ha
Cooper 2.157 ha
Source: Colombian Geological Service

15. We are working on infraestructure projects
RAIL ROADS
Roads are the only mean of transportation off all Metalurgical
and Coque Coal produced in Cundinamarca, Boyacá,
Santander and Norte de Santander provinces
Source: Ministry of Mines and Energy
The main production of this provinces is around 8 million tn
exported principally by Barranquilla, Cartagena and
Buenaventura Ports

16. Mining sector in Colombia plays a significant role
8 35%
29%
7 30%
6 23% 25%
20% 21%
5 19% 19% 18%
% Mining
USD Billions
20%
4 14% 3.9 20% of FDI in 2011 was to mining,
15%
3 2.5
2.7 increasing 32% over 2010
2.1
1.7 10%
2
1.2
0.9 0.7 0.9 5%
1 0.6 0.5 0.6 0.7
0.1 0.3 0.3
0 0%
2004 2005 2006 2007 2008 2009 2010 2011
Mining Hydrocarbons % Mining/Total
18,000 30%
25%
24% 22%
15,000 25%
21% 21%
20% 20% 12,454
Millions USD FOB
20% 20%
% Mining Exports
12,000 20%
9,421
In 2011 22% of exports came from 9,000 13% 7,447
8,154 15%
mining sector 6,346
6,000 5,208 10%
4,302
3,320
2,639
3,000 5%
1,523
0 0%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(pr) (pr)
Source: Banco de la República Mining Exports Mining/Total Exports

17. We want to bcome Leaders in mining
Efficient governmental institutions and responsible mining sector
Access mining potential and consolidate growth
Prosperity for Colombia

18. Thank You
Henry Medina
Ministry of Mines and Energy
hmedina@minminas.gov.co