rare earths are important elements for high-tech and energy transition and from what is known, Auxico Resources Canada is the company that would be behind the first mining project that seeks to exploit them in Colombia.
They affirm that they already have the permission of the National Mining Authority (ANM) and the Regional Autonomous Corporation of Orinoquía (Corporinoquia), which allows them to exploit on a small scale, however, In a document known to EL TIEMPO, the authority indicates that it is unaware of a license to the company.
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This is file YO-2023-06191, where the Corporation responds to Edwin Suárez, director of the newspaper El Morichal, that resolution 500.3622-2089 of December 30, 2022, granted the citizen a temporary environmental Clímaco Silvestre Unda Barrios for the execution of open pit mining, in order to exploit rare earth minerals in the Minastyc property, Located in the rural area of Puerto Carreño, Vichada.
The resources allowed by the authority contemplate the “exploitation and benefit of niobium minerals and their concentrates, tantalum and their concentrates, vanadium and their concentrates, zirconium and their concentrates, tin and their concentrates, and gold and their concentrates.”
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The entire procedure was requested by Mr. Climaco Silvestre Unda
In this file they also explain that they have not received any document that gives reason for the works that this Canadian company is going to carry out in the mentioned mining project of Mr. Unda Barrios.
“Although there is the logo of the company Auxico Resources of Canada Inc, there is no evidence of any legal document related to this Environmental Authority that demonstrates that there is some type of work contract or document related to the ownership of the project to said company, since the entire procedure was requested by Mr. Climaco Silvestre Unda Barrios.”, indicates the file.
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What’s behind the process
The foregoing does not indicate that the project to exploit rare earths in the country cannot continue. What is explained is that the permit is precisely for Unda Barrios, not for the company.
The truth is that all the documents and studies on environmental impacts and exploitation resources were paid for by Auxico, explains Canadian researcher Daniel Bland, adding that Auxico administer in 2020 the payment of 750,000,000 pesos to the owner of Minastyc for the title and possession rights of the property for a period of 60 years.
According to Decree 1076 of May 26, 2015, through which the Sole Regulatory Decree of the Environment and Sustainable Development Sector is issued, in its chapter 3 on environmental licenses, “The beneficiary of the environmental license may at any time assign it totally or partiallywhich implies the assignment of the rights and obligations derived from it”.
This being the provision of the law, the company can formalize the purchase of Minastyc from Mr. Unda Barrios and when this is provided, he may assign the environmental rights and its conditions, notifying the national authority about whether it will be a total or partial transfer.
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Auxico’s efforts to exploit in Colombia
Auxico’s efforts in the department of Vichada date back to 2019, after a failed attempt to settle in Guainía, when they signed a memorandum of understanding with then-governor Javier Zapata Parrado, who had to back down after protests against the project.
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Between 2020 and 2021, they investigated a historical point where asteroids impacted and with a program of 23 test wells confirmed the presence of rare earth elements, including tantalum and niobium (coltan)as well as others such as titanium, scandium, lithium, platinum and tin.
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Auxico explored important highland deposits in Colombia.
Although they are called lands, they are actually a set of 17 very important elements for the construction of aircraft structures, electric vehicles, screens, cell phones and are even demanded in military defense, as they allow the development of more efficient combat systems.
These minerals are essential in the transition process towards cleaner and more sustainable energy sources, That is why with the great discovery, Auxico acquired the rights to Minastyc in 2020 and in 2021 began negotiations to acquire a new 1,293-hectare piece of land called Agualinda that borders the first property.
Collectively, the company has a total of 1,482 hectares under its control, which gives it access, according to them, to a reserve of 1 million metric tons of rare earths and other minerals in the department of Vichada.
The researcher explains that Corporinoquia’s environmental license allows them to extract up to 50,000 tons of rare earths per year, while a global or defined license is approved, in addition, in the Minastyc area these elements are concentrated in alluvial sands, and their access is limited to a depth of 3 or 4 meters.
This peculiarity implies that the exploitation of these resources does not require expensive traditional mining methods, such as blasting or drilling, which translates into high profitability for Auxico.
In total, the company estimates by 2040 to have raised 3,900 million dollars, with an annual profit of around 220 million dollars (which at the real exchange rate would be more than 913,332 million pesos per year).
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It should be noted that the project in Colombia will not only be limited to extraction, as the company announced that it planned to build a rare earth refinery in the free zone of the city of Santa Marta, Colombia. With an extension of 10,000 square meters, they expect it to have an annual yield of 36,000 tons. The estimated cost to carry out this project is estimated at 116.2 million dollars.
Environmental impact and problems with communities
Beyond meeting these objectives, Auxico has a great responsibility to the communities. in fact, In the early years of the project in Vichada, a prior consultation was requested with ethnic communities: indigenous, rom, black, raizal and palenquera on the adoption of administrative measures for the Minastyc property with the criterion of direct affectation.
However, through resolution number ST-1325 of September 24, 2021, it was resolved that the consultation did not proceed, because the closest ethnic community was 3.7 kilometers from the project and physically separated by alluvial deposits. Despite what one may think, this answer has a limitation.
Although the Directorate of the National Prior Consultation Authority took into account changes in air quality, sound pressure levels, geological conditions, the quality of groundwater resources, and many other aspects, Bland explains that The impact that the national authority measured was for the Minastyc property, which only has an extension of 189 hectares. The company already has 1,482.
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Harold Barbosa, Vice President of Latin American Operations at Auxico Resources, presenting the Minastyc Project to the Provincial Parliament of Vichada.
What’s next for Auxico
In this sense, one of the great challenges facing the company will be to ensure that your entire project meets the required environmental standards and that its operations do not affect surrounding indigenous communities.
Being aware of this responsibility, the then CEO of the company, Frederick Kozak, told the Business & Human Rights Resource Center that the property is not in indigenous territory; however, Auxico recognizes the importance of working hand in hand with the communities, which is why que His team held a meeting with the Warrawuanae community of the Guacamayas Maiporé Reservation, to begin the purchase of tin from artisanal miners.
Beyond these advances, for researcher Bland one of the biggest challenges facing Auxico will be to ensure that its supply chain is transparent. According to a recent report by the Ombudsman’s Office, a large part of the illegal mining in southern Venezuela, located just half an hour from Auxico’s properties in Vichada, It is under the control of the ELN and FARC dissidents. It is common for these armed groups to make coltan seizurestin and other minerals smuggled into the country
data this context, Bland notes that implementing a rigorous due diligence strategy becomes crucial to ensure that mined rare earths illegally in Venezuela are not laundered and legalized as products of Colombian origin before entering the global market.
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