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MINING and ENERGY PLANNING UNIT (UNIDAD DE PLANEACIÓN MINERO ENERGÉTICA - UPME) Carlos Arturo Flórez Piedrahita General Director

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MINING and ENERGY PLANNING UNIT (UNIDAD DE PLANEACIÓN MINERO ENERGÉTICA - UPME) Carlos Arturo Flórez Piedrahita General Director MINISTRY OF MINES AND ENERGY Luis Ernesto Mejía Castro Minister MINING AND ENERGY PLANNING UNIT (UNIDAD DE PLANEACIÓN MINERO ENERGÉTICA - UPME) Carlos Arturo Flórez Piedrahita General Director Jairo Herrera Arango Mining Planning Subdirector Technical team of the Mining Planning Subdirection: Gloria Patricia Gamba Saavedra Luz Constanza Fierro Enciso Maria Claudia Díaz Orozco Sergio Alfonso Mejía Tobón Editorial text: Alvaro Ponce Muriel. Based on the study report “Transportation and port infrastructure for the mining development in Colombia” by Consorcio Silva Carreño y Asociados S.A. - Hugo Millán between 2003 and 2004 for UPME Translated by Las Traducciones EU - Official Translation www.lastraducciones.com Unidad de Planeación Minero Energética - UPME, 2005 ISBN: 958-97750-1-2 Design, preprint and print: www.digitosydisenos.com Bogota, November, 2005 TABLE OF CONTENTS INTRODUCTION .......................................................................................................................... 5 1. CONCEPT OF MINING DISTRICTS ........................................................................................... 7 1.1. REGIONAL DEVELOPMENT AND MINING AGGLOMERATES............................................ 7 1.1.1 The new economic geography ...................................................................................... 7 1.1.2 Regional competitiveness.............................................................................................. 9 1.1.3 Mining agglomeration and local developments in America ...................................... 10 1.2 CONCEPT OF MINING DISTRICT..................................................................................... 12 1.2.1 Definition scope.......................................................................................................... 12 1.2.2 Characterization of mining districts ........................................................................... 12 2. AREAS CHARACTERIZED AS MINING DISTRICT .................................................................... 17 2.1. DISTRICT RANKING........................................................................................................ 17 2.2 GROUP I - HIGH PRODUCTION VOLUME DISTRICTS....................................................... 19 2.2.1 Barrancas District......................................................................................................... 19 2.2.2 La Jagua de Ibirico District .......................................................................................... 21 2.3 GROUP II. MEDIUM-SCALE PRODUCTION DISTRICTS ................................................... 23 2.3.1 Sabana de Bogota district........................................................................................... 23 2.3.2 Paz del Río District ...................................................................................................... 26 2.2.3 Luruaco District........................................................................................................... 29 2.3.4 Ataco-Payandé district................................................................................................ 30 2.3.5 El Tambo - Dovio district............................................................................................. 33 2.2.7 Amaga - Medellin district ............................................................................................ 38 2.2.8 El Zulia district ............................................................................................................. 41 2.2.9 Puerto Nare district ..................................................................................................... 43 2.2.10 Oriente Antioqueño district ...................................................................................... 45 2.2.11 Montelibano district.................................................................................................. 46 2.2.13 Nordeste Antioqueño district.................................................................................... 49 2.2.14 Frontino district ......................................................................................................... 51 2.3 GROUP III. DISTRICTS PRODUCERS OF PRECIOUS METALS AND EMERALDS ................ 55 2.4.1 Marmato mining district............................................................................................. 55 2.4.2 Santa Rosa district ...................................................................................................... 57 2.4.3 Itsmina mining district ............................................................................................... 58 2.4.4 Costa Pacifica Sur mining district ............................................................................... 59 2.4.5 San Martin de Loba district......................................................................................... 61 2.4.6 La Llanada district....................................................................................................... 62 2.4.7 Vetas - California district ............................................................................................. 64 2.3.8 Mercaderes district...................................................................................................... 65 2.4.9 Muzo district ............................................................................................................. 66 2.4.10 Chivor district............................................................................................................ 68 3 MINING DISTRICTS AND TRANSPORTATION......................................................................... 71 3.1 TRANSPORTATION INFRASTRUCTURE AND COMPETITIVENESS ................................... 71 3.2 ORE TRANSPORTATION ................................................................................................. 71 3.3. TRANSPORTATION INFRASTRUCTURE IN THE MINING DISTRICTS............................... 73 3.4 CAPACITY OF THE CURRENT SYSTEMS FOR ORE TRANSPORTATION ............................ 75 3.4.1 Group 1 districts ......................................................................................................... 76 3.4.2 Group 2 districts ......................................................................................................... 76 3.4.3 Group 3 districts ......................................................................................................... 80 3.5 MAIN LIMITATIONS........................................................................................................ 80 4 COAL EXPORTING DISTRICTS ................................................................................................ 82 4.1. COAL INTERNATIONAL OUTLOOK................................................................................. 82 4.2 MARKET PERSPECTIVES FOR COLOMBIAN COAL........................................................... 83 4.2.1 Offer situation............................................................................................................. 83 4.2.2 Commercial perspective.............................................................................................. 85 4.3 DISTRICT INFRASTRUCTURE FOR COAL EXPORTS.......................................................... 86 4.3.1 Barrancabermeja District............................................................................................ 86 4.3.2 La Jagua de Ibirico district .......................................................................................... 89 4.3.3 Montelibano district - San Jorge Zone......................................................................... 91 4.3.4 El Zulia district ............................................................................................................. 92 4.3.5 Paz del Rio District ...................................................................................................... 94 4.3.6 Zipaquira district......................................................................................................... 96 4.3.7 Amaga district............................................................................................................. 97 4.3.8 Potential zones ........................................................................................................... 99 4.4.1 Available infrastructure for coal transportation ...................................................... 100 4.4.2 Freight and operation costs...................................................................................... 101 4.4.3 Restrictions of the current transportation infrastructure........................................ 102 4.4.4 Available port infrastructure for coal shipping ........................................................ 103 4.5 INFRASTRUCTURE PROJECTS PRIORITY TO COAL MINING .......................................... 105 4.5.1 Coal internal transportation perspective ................................................................. 105 4.5.2 Port infrastructure perspective ................................................................................ 105 4.5.3 Priority projects ........................................................................................................ 107 MAIN MINERAL PRODUCTION................................................................................................ 111 INTRODUCTION In last few years the Colombian mining activity, in particular the one related to coal, gold, and ferronickel,
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