BOGOTA — Canadian miner Gran Colombia Gold has filed a US$700 million lawsuit against Colombia under the Colombian-Canadian free trade agreement after the government ordered the company to cease operations at the El Burro site in Marmato until it has further consulted with local residents.
The Marmato project has been plagued by controversy ever since operations began 10 years ago, with heavy resistance from traditional mining communities of the 500 year-old town. The company has been unable to remove illegal miners from the area — by some reports, illicit mining is a US$2.5 billion industry in Colombia.
Gran Colombia’s plan to flatten a mountain and create an open pit mine has also met with resistance. Critics say the initiative would not only destroy the livelihoods of the miners, but also the surrounding community and the environment.
Marmato is one of the company’s two key mining assets and is estimated to contain 14 million ounces of gold. In 2016 it accounted for 16 per cent of the company’s total gold sales, more than US$29 million.
Issues in Marmato could add to existing doubts in the company’s future prospects, with its stock price having declined from $11.50 just five years ago to around $0.10 a share today.
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