August 1, 2011 / 9:45 PM / 8 years ago

Colombia extends ban on new mining requests-regulator

* Colombia had hinted it could extend ban til next year

* Ban on new requests to last until early 2012

* Nearly 500 miners killed between 2005-2010 - govt

BOGOTA, Aug 1 (Reuters) - Colombian extended a suspension of new requests for mining concessions until February 2012 to ease congestion in processing, the mining regulator Ingeominas said on Monday.

The world’s No. 4 coal exporter has been hit by a series of mine explosions that killed dozens of workers over the last couple years, prompting calls for stricter oversight at a time when Colombia’s mining sector is enjoying a mini-boom.

“(Colombia) extends the term of suspension ... for the receipt of proposed contracts for mining concessions and legalization of traditional mining for a period of six months from August 3 this year,” the regulator said in a statement.

In February, Colombia halted all requests for mining concessions for an initial six months, but left the door open for another half-year extension. [ID:nN09194729]

The government says it needs more time due to the volume of requests it receives each year. According to Ingeominas, Colombia received 3,600 concession requests last year, 3,900 in 2009 and 7,800 in 2008.

Colombia has experienced a surge in oil and mining investment since a 2002 U.S.-backed crackdown against leftist rebels. A flood of new players has emerged to take advantage of government policies meant to attract investors.

The ban on new requests is unlikely to affect production or output goals over the coming years as most of the gains are expected to be made from existing producers or projects that have already been submitted or received regulatory approval.

The mining sector has been plagued by safety and corruption scandals, mainly in small mines, prompting the government to redesign the mining regulator and create a new mining department in the energy ministry. The government says nearly 500 miners were killed between 2005-2010.

The constitutional court this year gave Colombia two years to reform a mining law after the country failed to consult local communities on changes in the sector.

“The government is expected to present a number of pending reforms to mining sector regulations this week that will shed light on how the Juan Manuel Santos administration plans to strengthen a sector beset by weak institutions, numerous safety concerns and allegations of corruption,” Eurasia Group said.

“The reforms will focus on the creation of a new National Mining Agency ... that will assume many of the functions currently undertaken by Ingeominas. One of its attributes will be to clarify regulatory inconsistencies related to the permitting process and environmental regulations.”

Reporting by Jack Kimball;editing by Sofina Mirza-Reid

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