Natural Resources and Investment in Colombia
During the Presidency of Alvaro Uribe (2002 – 2010), Colombia saw a large increase in foreign direct investment (FDI) coming into the country. This was partly due to Uribe administration policies, which incentivized FDI and eliminated the tax on the repatriation of profits by foreign corporations. Simultaneously, in 2006, the granting of mining titles in Colombia exploded from a historical annual average of less than 200 titles covering some 40.000 hectares of land to the issuance, that year, of over 800 titles covering about 530.000 hectares of national territory. Ever since, the trend has stabilized at a much higher level than its historical average as the country continues to attract large amounts of FDI towards the extractive sector.
Natural Resources and Investment in Colombia
Moreover, records show that the Colombian state revenue collected from mineral exploitation between 2000 and 2010 was proportional to the share of national GDP represented by the mining sector. Meanwhile, during the same decade, fossil fuels and the petroleum industry contributed to the Colombian government between four and seven times the revenue percentage that the industry represents as a share of the national GDP. The fact that the hydrocarbons sector in Colombia represents such a large percentage of the revenue collected by the national government is due to several factors. Firstly, the main company operating within Colombia’s oil sector is the nationally owned giant, Ecopetrol. Secondly, Ecopetrol and other companies operating within Colombia manage oil refineries and petrochemical industries within the country. However, in the case of mining, Colombian exploitation is mainly geared towards export, the sector is smaller, and none of it is managed by a state enterprise.
Simultaneously, during 2016, coal briquettes were Colombia’s second largest export, after crude petroleum, accounting for 15% or US$4.4 billion of the country’s total exports. This represents an increase from 2006, when Colombia exported US$3.7 billion worth of coal briquettes. Similar to the crude petroleum industry, coal exploitation in recent years has contributed to the reprimarization of the Colombian economy by abolishing entire zones of more productive and value added activities, such as agriculture. This trend is particularly evident in Colombia’s northeastern departments of la Guajira and Cesar, which are major producers of coal.
In the case of the oil industry, the Chinese presence in Colombia is mainly felt through three corporations that are owned by the state giants Sinochem and Sinopec. The three main Chinese oil subsidiaries active in Colombia are Mansarovar Energy (Sinopec), a joint venture with Indian capital since 2006; Emerald Energy (Sinochem), since 2006; and New Granada Energy Colombia (Sinopec), since 2010. These three foreign capital and state owned corporations increased China’s total oil extraction, in Colombia, from some 14.000 barrels per day (bpd) in 2009 to approximately 25.400 bpd in 2014.
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