Glencore unit Prodeco has commenced the formal process of handing back contracts in Colombia pertaining to two coal mines after the country accepted a previously rejected request.

The process has now secured the approval of Colombia’s National Mining Agency (ANM), which initially denied the request citing outstanding obligations, including environmental management, reported Reuters.

In February 2021, Glencore said that it would hand over operations at the Calenturitas and La Jagua mines, which were placed in care and maintenance (C&M) in March 2020, to the Republic of Colombia citing uneconomic operations.

Following the ANM rejection, Prodeco carried out another operational review to assess additional cost efficiencies as the mining agency expected the prices of coal to remain low in its target markets.

However, the firm concluded that the review remained congruous with earlier reviews that the mines remain uneconomic to operate.

The coal miner said it would continue to place the two mines on C&M until the completion of the formal process of relinquishing the contracts.

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In a press statement, Prodeco said: “During the relinquishment process, Prodeco will comply fully with all its environmental and social obligations arising from its mining operations and the termination thereof.

“Prodeco will continue to work with the national, regional, and local authorities toward the proper completion of this process.”

The La Jagua is an open-pit coal mine in the municipality of La Jagua of Ibirico. The Calenturitas mine is situated in the department of Cesar and produces thermal coal.

Over the last 30 years, Grupo Prodeco invested more than $3bn in the two coal mines, as well as paid almost $3bn in royalties and taxes.