1

Maria Constanza GarciaPresident

March 2013

THE NATIONAL AGENCY OF MINING IS THE POINT OF ENTRY FOR COMPANIES CONDUCTING MINING BUSINESS IN COLOMBIA

STRONGER AND CLEARER ORGANIZATIONS: Structure of the Mining sector

National Agency of Mining

Colombian Geological Service

Monitoring Markets& Sector Planning

Deputy Minister of

Mining

Deputy Minister of

Energy

Entities with specific functionsEntities with specific functions

Minister of Mining and Energy

Mining Authority

Subsurface Knowledge

Mining and Energy Planning Unit

PresidentLegal Office

Office of Technology and Information

Internal Controls Office

Vice President of Contracting and Titles

Vice President of Monitoring, Control

and Mine Safety

Vice President ofPromotion and Development

Vice President of Administration and

Finance

Registry Management

Management of Mining Titles

Management of Mine Security and

Rescue issues

Management of Monitoring and

Control

Royalty Collection Management

Management of Small and Medium

Scale Mining

Promotion Management

Board

ORGANIZATIONAL STRUCTURE OF NAMMining Authority

Promote and encourage development of mining.

Management of mineral resources for and on behalf of the state.

Hold, manage and track concession and mining rights for exploration and development of minerals.

Managing the national mining registry.

Calculate, collect, manage and transfer royalties and compensation.

Article. 4 Decree

4134/2011

MAIN FUNCTIONS

OPPORTUNITIES IN COLOMBIA Colombia is a destination for investment

Countries that attract investment in the

mining sector

Source: (Graph 1) Corporate Exploration Strategies 2012, Economic Metals Group- MEG. (Graph 2) Survey of mining companies 2011/2012 (25 countries) by theBehre Dolbear Group.

Top destinations for exploration investment

25% of the global exploration budget

57 52 5145 43 41 39 37 36 36 33 32 32 30 29 29 28 27 26 25 22 22 19 17 16

*(Rank 7/25)

OPPORTUNITIES IN COLOMBIAThere are 50 new investment projects in 13 reigons

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

2,000

4,000

6,000

8,000

10,000

12,000

2,9 3,3 3,24,0 4,1 4,5 4,9 5,0 5,2 5,4 5,4

5,8 6,2Mining GDP

+5,9%

Source: National Bureau of Statistics - DANE. Mining and Energy Planning Unit-UPME. Ministry of Mines and Energy.

Coal Production

20002001

20022003

20042005

20062007

20082009

20102011

20122013

2014 -

20

40

60

80

100

120

38 44 39 50 54 60

66 70 74 73 74 86 89

110 114

Historical ProjectedMiT

n

OPPORTUNITIES IN COLOMBIAMineral Production

Nickel Production Gold Production

Silver Production 2012 Regional Coal Production

2000 2001

2002 2003

2004 2005

2006 2007

2008 2009

2010 2011

20120

5

10

15

20

25

30

-30%-20%-10%0%10%20%30%40%50%60%70%

Tonnes

2000 2001

2002 2003

2004 2005

2006 2007

2008 2009

2010 2011

20120

10

20

30

40

50

60

-30%-20%-10%0%10%20%30%40%50%

Thousands of Tonnes

2000 2001

2002 2003

2004 2005

2006 2007

2008 2009

2010 2011

20120

10

20

30

40

50

60

70

-100%

-50%

0%

50%

100%

150%

Tonnes

GUAJIRA; 39%

CESAR; 52%

BOYACA; 3%

OTHER REIGONS 6%

OPPORTUNITIES IN COLOMBIAWe are ranked in the top 10 for worldwide producers and exporters of coal

PR ChinaUSA

India

Indonesia

South Afri

ca

Australi

aRussi

a

Kazakh

stan

Colombia

Poland

0

500

1,000

1,500

2,000

2,500

3,000

Top 10 Thermal Coal Producers

Indonesia

Australi

aRussi

aUSA

Colombia

South Afri

ca

Kazakh

stan

0

50

100

150

200

250

300

350

Top 10 Exporters of Coal

Source: http://www.worldcoal.org/resources/coal-statistics/.

The Mining sector has provided a significant source of economic growth for the Colombian economy

The Mining sector has provided a significant source of economic growth for the Colombian economy

What are we doing?

• Comprehensive Audit

Safety and Rescue

• Applications Backlog Processed

• Promotion and Development

Strategic Mining Areas

CON

TEN

T

By March 1: 1,759 reviews of

existing contracts for compliance with conditions

438 field inspections

330 comprehensive audit reports

Comprehensive Audit of all 9,500 mining titlesComprehensive Audit of all 9,500 mining titles

Support Activities of Comprehensive Audit

Group 1: HMV Engineers - GENIVAR ColombiaGroup 2: Bureau VeritasColombia,-Tecnicontrol and BVQI

• Up to 4** more than1,400 reports

4* annual visits to titles in the development stage 2 annual visits to titles in the exploration stage 1,400** comprehensive audit reports per month 100% of mining titles fully audited this year 2% of royalties assigned to review process costs

CAD$191 M

COMPREHENSIVE AUDITNew Approach

850

CAD$5.6 million

Rescue workers (National Mining Rescue)

Contract awarded to purchase lifesaving equipment (breathing apparatus)

Emergencies attended

Accident prevention visits to mine title holders

101

564

SAFETY AND RESCUEAll emergencies attended

Promote a culture of accident preventionPromote a culture of accident prevention

• Comprehensive Audit

• Applications Backlog Processed

• Promotion and Development

Strategic Mining Areas

What are we doing?CO

NTE

NT

By March 1: 11,361 Requests

evaluated (58%) 977 titles

granted Processed all

applications for temporary licenses

19,629 requests evaluated by mid year19,629 requests evaluated by mid year

Re-open applications system New registration information system Migrate geographic information system to Magna – SIRGAS Evaluate locations available for new mining activities

Delegated; 5,178

NAM 14,451

19.629 requests (feb. 2011)

Processing8,268

Processed 11,361

=

APPLICATIONS BACKLOG PROCESSED19,629 Mining Application Requests

• Comprehensive Audit

• Applications Backlog Processed

• Promotion and Development

Strategic Mining Areas

What are we doing?CO

NTE

NT

52 signed contracts for legalization of traditional mining activities since June 2012

(Antioquia, Boyacá, Caldas, Caquetá, Cundinamarca, Guajira, Meta, Santander, Sucre and Tolima)

Legalization of traditional mining activities and technical support to SMEs

Legalization of traditional mining activities and technical support to SMEs

Support sessions for legal transition to formal economy (Boyacá, Antioquia, Córdoba, Cundinamarca and Huila)

Support forums for provision of additional training: Guainía, Cauca, Vaupés, Vichada and Putumayo

PROMOTION OF SMALL AND MEDIUM SCALE MINING

Comprehensive approach: social, environmental, economic and legal

New scheme to contract extensionsNew scheme to contract extensions Cerro Matoso S.A

Paz del Río Mining S.A. (Iron & Coal)

TRANSPARENCY AND CERTAINTY

Cerro Matoso changed the way to negotiate contracts

Coal Agreement with Paz del Río (Votorantim) total value of CAD$7.3 bn

New Agreement with Paz del Río Mining totals CAD$7.3 bn

Cerro Matoso shows the way for new mining contracts

What are we doing?

• Comprehensive Audit

• Applications Backlog Processed

• Promotion and Development

Strategic Mining AreasCON

TEN

T

STRATEGIC MINING AREAS (SMA): Background

Date LandmarkJun. 16, 2011 National Development Plan

Jan. 30, 2012 Determination of Minerals of Strategic Interest

Feb. 24, 2012 1st determination of SMA

Jun. 21, 2012 2nd determination of SMA

Oct. 2012 Geochemical sampling of SMA

Dec. 2012 Tender process for geophysical exploration of SMA

2013 Structuring the process and inter-agency coordination

Strategic Mining Areas (SMA) contracts awarded through a competitive process which seeks greater total benefits through increased investment and production.

Encourage the exploration and development of mineral resources, fulfilling international, social and environmental standards

Encourage the exploration and development of mineral resources, fulfilling international, social and environmental standards

19

Geoscientific data compilation

Structuration process

Launching the Process

1st Competitive Process

Semester 12013

Semester 22013

2014

STRATEGIC MINING AREAS (SMA): Stages

Geological mapping and exploration methods - not ground disturbing (CGS)

Prospecting and exploration

Development

1st Competitive Process of SMA

STRATEGIC MINING AREAS (SMA): Scope

21

STRATEGIC MINING AREAS (SMA): Inter-Agency Coordination Scheme

1. Single channel communication under the liaison model

2. Formal and informal relations to facilitate routine inter-agency cooperation

3. Joint training to foster understanding of each agency’s role

4. Mechanisms for sharing data5. Common language and unified messages6. Environmental and social assessments7. Technical input for the Competitive Process

1. Single channel communication under the liaison model

2. Formal and informal relations to facilitate routine inter-agency cooperation

3. Joint training to foster understanding of each agency’s role

4. Mechanisms for sharing data5. Common language and unified messages6. Environmental and social assessments7. Technical input for the Competitive Process

Thank you