Prodeco’s mining contracts include the Calenturitas (above) and La Jagua mines. (Photo: Grupo Prodeco)

Glencore’s Colombian subsidiary, Prodeco will begin the process of handing its mining contracts back to the Republic of Colombia through the National Mining Agency (ANM). The mines will remain on care and maintenance (C&M) until the formal process of relinquishing the contracts is complete. The port will continue to operate in line with its obligations as a public service port.

Last month, the ANM declined Prodeco’s request for the Calenturitas and La Jagua mines to remain on C&M. Prodeco conducted another operational review to identify further cost efficiencies, given that the ANM expected prices to remain low in Prodeco’s target markets. The company said the result wasn’t any different from previous ones conducted and it continues to remain uneconomic to recommence operations.

Glencore said the decision to relinquish the mining contracts was not taken lightly and was a disappointing outcome.

Over the last 30 years, Grupo Prodeco has invested in excess of US$3 billion and paid almost US$3 billion in royalties and taxes. “We are proud that our investment in a multitude of social engagement projects and initiatives, has delivered tangible improvements in the quality of life for the surrounding communities, and supported the important peace Pprocess in Colombia,” the company said.

Prodeco will engage with its employees, contractors and host communities on the impact of relinquishing the titles. Prodeco has recommenced the voluntary redundancy program, which significantly exceeds the statutory requirements under Colombian law. This process will also be supported by a social transition program for the workforce and the communities surrounding Prodeco’s operations.