Wednesday, 3 August 2011

July 2011 The ‘chicharron’ that is Ingeominas

‘Chicharron’ (pork crackling) is a Colombian term that is used to describe a complete mess or balls up, and the term can easily be applied to national geological survey Ingeominas, which is at the centre of a political storm due for a host of reasons that has impeded the efficient management of the sector.

The central problem has been the failed implementation of an electronic Colombian Mining Cadastre that is the repository of information of mining and exploration concessions. This is what explores consult when they want to see what land is available and what the government uses to monitor and regulate the sector. To put it bluntly, if this does not work everything grinds to a halt, and that is precisely what has happened to the extent that even mining and energy minister Carlos Rodado is making jokes: “It is not a cadastre but a catastrophe”.

The electronic system that was intended to modernise concession title administration, improving efficiency and information provision and collection but its failure to do so, despite a couple of attempts at patching it up caused Ingeominas to continue to operate its old system in parallel, extending the time needed to process concession title applications while giving the government little precision on what the status of the sector actually is.

Whilst an estimated 9,000 mining titles have been awarded some 20,000 remain pending causing the government to impose a moratorium on new title applications earlier this year to work through the backlog. As a result of the systemic faults in Ingeominas a government study found that on average concession requests took 600 days to be awarded, according to news weekly Semana, a bureaucratic nightmare for explorers.

Such delays and uncertainty also became a fertile breeding ground for corruption as Ingeominas officials sold privileged information, allowed concessions to be granted in protected areas and offered speedy expedition of titles for fee. The same government study found that some concession titles only took a month to be awarded.

The Ingeominas chicharron also made government attempts to control land speculation ineffective by awarding concession titles to individuals that presented the bare minimum of information with the sole intent to sell them on to other companies. Many titles were never registered on the National Mining Register to avoid paying the surface canon, defrauding the state of considerable financial resources and causing the concessions to enter into a kind of administrative limbo that foreign explorers have to unravel and put right when acquiring concessions.

There is light at the end of the tunnel however. The government is creating a National Minerals Agency to regulate the sector similar to the way the National Hydrocarbons Agency regulates the oil sector. The good news for mineral explorers is that the World Bank has made resources available to set the cadastre ship straight and the government will work with international expert advisors in mining concession systems to implement a workable technology platform that is due to be operational in 2012.

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