Glencore subsidiary Prodeco is set to start the process of relinquishing mining contracts in Colombia as its two mines continue to remain suspended.
The mining contracts will be returned to the Republic of Colombia through the National Mining Agency (ANM).
The step comes after ANM rejected Prodeco’s request to keep the Calenturitas and La Jagua mines in care and maintenance.
After ANM refused Prodeco’s request last month, the company carried out another operational review to identify additional cost efficiencies as the mining agency expected the prices of coal to remain low in its target markets.
However, the conclusion remained congruous with earlier reviews that the mines remain uneconomic to recommence activities.
The two mines will be in care and maintenance until the formal process of relinquishing the contracts is complete.
In a statement, Prodeco said: “The decision to relinquish the mining contracts was not taken lightly and is a disappointing outcome. Grupo Prodeco has over the last 30 years invested in excess of $3bn and paid almost $3bn 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 Process in Colombia.”
The company now plans to engage its employees, contractors and host communities on the impact of this decision.
La Jagua is an open-pit coal mine located in the municipality of La Jagua of Ibirico, while Calenturitas is situated in the department of Cesar and produces thermal coal.