MAC: Mines and Communities

Colombia: Segovia and Remedios shut down amid dispute with Canadian miner

Published by MAC on 2016-09-23
Source: Bloomberg, Colombia Reports, Statement, The Star

Key gold mining areas went on a massive strike

Two key gold mining towns in the north of Colombia went on a massive strike amid government attempts to shut down small scale mining operations and after the assassination of the local miners’ attorney.

According to Colombia Reports, residents of Segovia and Remedios, in the northeast of the Antioquia Department, shut down Gran Colombia Gold’s mining operations, schools and public transport.

The expansion plans of Gran Colombia Gold subsidiary Zandor Capital into territory where hundreds of townsmen are earning their livelihood spurred the conflict.

While the CEO of the Canadian company claims to be on the right side of the law, illegal paramilitary group AGC sent out pamphlets threatening to kill those opposing the firm.

Gran Colombia is said to be the largest underground gold and silver producer in Colombia, with several mines at its Segovia and Marmato. The company is currently advancing a project to develop a large-scale gold and silver mine in Segovia.

Read also in MAC:

2012-03-14 Colombia doesn't yet enjoy a "golden peace" - not by any means
2011-09-19 Colombia: the murder of Father José Reinel Restrepo

Death, extortion stalk workers at Canadian mine in Colombia

Fearful workers at Gran Colombia Gold mine say they have started to pay off local mobs to keep working.

James Bargent

The Star -

Dec. 17, 2016

SEGOVIA, COLOMBIA—It is nine in the evening and there is a knock on the door of Andres Bedoya’s house. He opens to find a skinny teenager. The youth raises a revolver to Bedoya’s head and fires.

Bedoya had no enemies, no debts and no links to the armed groups that plague this part of northern Colombia. His only crime was to work in the mines of Canadian mining giant Gran Colombia Gold.

Bedoya was the first to die in a terror campaign waged in Segovia late last year by Colombia’s most powerful criminal group, a paramilitary mafia known as the Urabenos. Their target was the riches produced in Gran Colombia’s mines. But it was ordinary miners who paid the price in blood.

One year on and the teenage assassin who carried out the attacks is beginning a 23-year prison sentence, after confessing his crimes in a recent trial. But the workers in Gran Colombia’s mines continue to pay — now in the form of money extorted from their meagre earnings.

The Toronto-registered company is Colombia’s largest underground gold and silver producer. But in Segovia, Gran Colombia does little actual mining. After arriving in the region in 2010, the company cut costs by laying off most of its directly employed workforce then rehiring them through subcontracting companies.

Today, about 65 per cent of production in Segovia is through Damasa, a business group of five mining companies all owned and run by one man, Julio Erazo. Damasa miners who spoke to the Star on condition of anonymity complained of low pay, a lack of proper safety equipment and unstable short-term contracts that are terminated if they complain.

In September last year, the workers’ already precarious situation took a deadly turn when the Urabenos dispatched an 18-year-old hit man known as “Venom” with orders to target Damasa. The Urabenos wanted their cut of Gran Colombia’s gold, and Julio Erazo had stopped paying it, according to witness testimonies in the case.

In the space of a month, Venom shot up a living room where a miner sat with his family, murdered Bedoya in front of his pregnant wife, hurled a grenade at one of the company processing mills and shot dead a mine manager in the street outside his home.

The attacks were accompanied by Urabenos threats distributed around town by unseen hands and circulated around social media networks. Their message was stark: every one of the 1,500-plus Gran Colombia contractors working for Erazo was a “military objective.”

“There was a lot of fear,” Carlos Durango, a miner who at the time worked for Masora, one of Erazo’s companies, said in an interview. “There were days we couldn’t work or we had to go to work without uniforms on because if they saw us with the red Masora shirts they would kill us.”

Before the arrival of the Urabenos in the region, Erazo had paid extortion — known in Colombia as “the vaccination” — every month. He knew the armed group he was paying well; they had been part of the same paramilitary death squad.

Erazo entered into mining after demobilizing from the now disbanded counter-insurgency the United Self-Defence Forces of Colombia (AUC). While Erazo moved into the legal world, many of his former comrades held on to their arms and dedicated themselves to controlling the criminal interests left behind by the AUC in the region — including extorting mining.

“I had to ask their permission to work,” Erazo said in an interview in November 2015. “They said ‘You can stay, but you know the system — you pay the vaccination.’”

Extortion was not the paramilitaries’ only interest in Gran Colombia’s mines. There were also their gangs of machuqueros — mine robbers. Machuqueros dig narrow mud tunnels into the company mines, then spend weeks at a time underground, stealing gold ore and processing it in their own rudimentary portable mills.

Erazo stopped the extortion payments then cleared his mines of machuqueros when the Urabenos drove his former AUC comrades out of the region and took over their business.

His refusal to co-operate with the new rulers of the region’s underworld was not tolerated for long. But Erazo was shielded by heavily armed bodyguards, so the Urabenos targeted his unprotected workforce.

In October 2015, after the Urabenos murdered a second Damasa miner, Erazo called together his workers and announced he was going to terminate their contracts and withdraw from the region.

“I said, ‘If I am the problem then I don’t want to be here anymore,’” said Erazo. “It is not worth the life of a single miner.”

Within two days, though, Erazo was vowing to continue, because, he said, of the efforts of the security forces and the solidarity of the workers.

The workers, however, tell a different story.

“The government sent the army and police to guard the access routes to the mines but not the routes to our houses, and this is what we said (to Erazo), you are taking care of the mine but not our homes,” said another former Damasa miner, who did not want to be identified for security reasons.

The miners felt abandoned by both Gran Colombia and Erazo, so, fearing both for their lives and for their futures, they took matters into their own hands.

“We looked for ways to contact the people who were intimidating us, to do what Julio Erazo wasn’t doing — pay the vaccination,” said Durango.

The miners cut a deal with the Urabenos for every work crew to make their own extortion payments. Numerous sources confirmed these payments continue today, and that the amount demanded continues to rise.

Gran Colombia CEO Lombardo Paredes says the company is not aware of extortion in its supply chain, either in the past or currently. However, he did not dispute worker claims that they are forced to pay their own “vaccination” to be allowed to work in Gran Colombia’s mines.

“There are things that escape from our control,” he said in a November interview at Gran Colombia’s Medellin offices. “This kind of extortion we cannot deal with, the underworld and organized crime we cannot deal with. It’s not our problem, it is a government problem.”

For the miners, though, extortion is their problem. Many of the crews work for a cut of the ore they mine, and the extortion can mean that on a bad month they now struggle to provide for their families.

“It is not profitable to work with Erazo anymore,” said Durango, who quit. “If the mine isn’t producing well then there might be enough to buy food but not enough to pay the vaccination as well.”

Top Colombia gold miner faces production halt amid protests

Bloomberg -

22 September 2016

BOGOTA – Gran Colombia Gold Corp. will have to halt production by Friday if protests at its operations don’t end by then, a further headache for the Colombian government as it struggles to enforce regulations governing the country’s gold industry.

Miners operating without permits inside Gran Colombia Gold’s concession have blocked roads since Monday, preventing company workers from reaching the main mining complex, according to CEO Lombardo Paredes.

The company is still producing gold from stockpiles, although these will soon run out. “On Friday we won’t have stock if this doesn’t end,” Paredes said in a telephone interview Wednesday. “We will have to halt operations.”

Protests stem from a breakdown in talks as the Colombian government seeks to end illegal production. A stoppage later this week could prevent Gran Colombia Gold from reaching a 2016 output target of 145 000 oz to 150 000 oz of gold, Paredes said.

Investors in the miner include billionaire Frank Giustra and founders of Pacific Exploration and Production, according to data compiled by Bloomberg. The company recently hired GMP Securities L.P. to carry out a strategic review that could include a sale of the company.

Gran Colombia Gold produced 116 857 oz in 2015, while Mineros SA produced 107 064 oz in Colombia. Mineros also has operations in Nicaragua.

Canada’s Gran Colombia Gold threatens Colombia miners with lay-offs, neo-paramilitaries threaten to kill them

Brian Levesque

September 22, 2016

Canadian company Gran Colombia Gold said Wednesday it will suspend contracts of some 1,000 miners while paramilitary successor group AGC threatened to assassinate those who are blocking the company’s activity in northern Colombia.

The coincidental threats to lay off and kill miners is the latest in a series of escalations that already cost the life of the judicial adviser of the miners working near Gran Colombia Gold’s mines in the towns of Segovia and Remedios, who was assassinated in Medellin over the weekend.

The expansion plans of Gran Colombia Gold subsidiary Zandor Capital into territory where hundreds of townsmen are earning their livelihood spurred massive protests from locals.

Thousands of informal miners, supported by a tens of thousands of inhabitants of the gold-dependent towns, shut down Segovia and Remedios after the death of their lawyer and authorities’ attempt to shut down the locals’ “illegal” mines on a disputed plot.

Both Segovia and Remedios have since turned into ghost towns since the strike was called Monday.

The strike has shut down Gran Colombia Gold’s operations and the towns’ public transport, schools, and business.

The company said Wednesday is losing $2 million a day and claims the contracts are unsustainable if the strike does not end, W Radio reported.

“On Friday we won’t have stock if this doesn’t end,” Gran Colombia Gold CEO Lombardo Paredes said in a telephone interview with Bloomberg News, adding that if that happens “we will have to halt operations.”

To Bloomberg, Paredes did not mention the threat to massively sack workers, most of whom would be from Segovia, the town that is revolting against the multinational.

While the CEO of the Canadian company claims to be on the right side of the law, the illegal paramilitary group AGC sent out a pamphlet in the town, threatening to kill those opposing the company.

The attorney representing the miners was assassinated on Saturday. Another mining leader was assassinated earlier this year.

At that time, the company claimed to be extorted by the group that is now seemingly doing Gran Colombia Gold’s dirty work.

North Colombia gold mining towns shut down amid deadly dispute with Canadian multinational

Brian Levesque

September 20, 2016

Two key gold mining towns in the north of Colombia went on a massive strike Monday amid government attempts to shut down small mining operations and after the assassination of the local miners’ attorney.

The residents of Segovia and Remedios, two towns in the northeast of the Antioquia province shut down mining operations, schools and public transport in a deadly dispute about mining titles.

Locals under both legal and criminal pressure

According to the locals, 97% of whom depend on small mining, Gran Colombia Gold subsidiary Zandor Capital has been seeking mining titles in areas where locals are carrying out mining activities, in some cases for decades.

The multinational received support from President Juan Manuel Santos, who on September 1 issued a decree in which he ordered the shutdown of all mining enterprises that do not adhere to a series of administrative and environmental regulations imposed on the mining industry.

Two weeks later, the attorney assisting the local miners was assassinated in provincial capital Medellin and regional authorities began operations to shut down mines.

This spurred the locals to massively take to the streets and demand legislation that allows them to formalize their businesses. According to the locals, they have increasingly received death threats while the government is running them out of business to favor the multinational.

“In Segovia there are more than a 100 enterprises that have been there for decades and pay taxes to the state. The owners seek to use clean technology, but the government itself does not provide the tools” to do so, Eliober Castañeda of the Mining Roundtable told newspaper El Tiempo.

Instead, these operations are dubbed criminal and shut down while the locals are terrorized by what seems to be a paramilitary group seeking to benefit Gran Colombia Gold, a company with several prominent members of Colombia’s economic and political elite in its board of directors.
Paramilitary involvement

The company claimed earlier this year to be the victim of extortion attempts by paramilitary successor group AGC after another mining leader was killed.

But according to the locals, it is not the multinational but the local people who are being threatened and killed.

“Since last year we have been the target of death threats through phone calls and leaflets. These were reported before the Antioquia Governor’s Office, before the police and the army, before the National Protection Unit and they haven’t given us attention,” Castañeda told Caracol Radio.

Although mining has taken place in this region for 450 years, many of those employed in the sector work in smaller, informal operations, often without the necessary titles and permissions.

Gran Colombia Gold Monitoring Civil Situation in Segovia and Remedios

September 21, 2016

TORONTO, ON --(Marketwired) - Gran Colombia Gold Corp. announced today that it is monitoring the civil situation in Segovia and Remedios in the Department of Antioquia, Colombia, in which the Company's Segovia Operations are located. A local mining collective, comprised in its majority by illegal miners, has convened a civil strike in Segovia and Remedios to exert pressure in negotiations it is having with the government of the Department of Antioquia, the National Mining Agency, Procuraduria, the Ministry of Energy and Mines, and the Company.

This mining collective has been in discussion with the various levels of government and the Company since February of this year related to the Colombian government's national program to formalize illegal mining in the country. At issue is Decree 1421 from the Ministry of Mining and Energy, which became effective on September 1, 2016, that requires small processing plants to obtain a registration with the Colombian government and an environmental license and to only process and sell gold with a proper certificate of origin.

While the Company's employees are not directly involved in this dispute, the civil strike has now impeded their ability to safely report to work. The Company is taking appropriate measures and has implemented the necessary security procedures. There are also increased numbers of governmental authorities present to aid in controlling the situation. The Company will continue to monitor and provide updates on this situation and whether there is any significant impact on its mining operations.

The Company is continuing to process stockpiles at the Segovia operations but the supply is limited and not expected to sustain operations into next week. On August 11, 2016, the Company announced it had increased its production guidance for 2016 to a total of 135,000 to 145,000 ounces of gold for the year and continues to expect total production to be in this range unless the local civil strike is prolonged.

About Gran Colombia Gold Corp.

Gran Colombia is a Canadian-based gold and silver exploration, development and production company with its primary focus in Colombia. Gran Colombia is currently the largest underground gold and silver producer in Colombia with several underground mines in operation at its Segovia and Marmato Operations. Gran Colombia is currently advancing a project to develop a modern, large-scale, gold and silver mine at its Segovia operations.

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