Money

Bogota –  The Colombian government has ended Canadian miner Greystar Resources Ltd.'s bid to develop a gold and silver project in a northern highland area, Energy and Mines Minister Carlos Rodado said.

The firm's plans to mine for precious metals in the Santurban paramo, or Andean high-altitude ecosystem, of Santander province are unviable both as an openpit and underground project, Rodado said.

Last week, Greystar withdrew an application for an environmental and technical license for its Angostura gold and silver mine project amid tense debate in that region between supporters and opponents of the project, although it subsequently said it would study an alternative, underground, option.

But in an official statement in response to Greystar, Rodado said that under no circumstance will an underground mine project that jeopardizes the paramo and sub-paramo ecosystem be permitted.

"Mining in the paramo has been ruled out completely," Rodado said in Wednesday's statement.

The minister added, however, that the Canadian company could submit a new project and that the government would be obligated to study and evaluate it.

Projections for the open-pit project were for production of 7.7 million ounces of gold and 32 million ounces of silver over 15 years.

The metal deposits cover roughly 1,000 hectares (2,470 acres) of a 3,645-hectare expanse of Greystar-owned land near the Santander villages of California and Vetas.

The gold- and silver-mine project had been vehemently opposed by communities in the northern city of Bucaramanga, Santander's capital, and 20 other nearby towns that depend on the Santurban paramo as a source of potable water.

According to the Santander chapter of the Fenalco merchants association, the Angostura project would have required the daily use of 40 tons of cyanide and 230 tons of ANFO, an explosive mixture - two toxic substances that could endanger Santurban's water resources.

In addition, the president of Fenalco Santander, Erwing Rodriguez Salah, told Efe that, according to experts, developing the mine would have required "very high daily water consumption, equivalent to what one family consumes over 20 or 30 years."

The Canadian firm, which invested some $150 million in the exploration phase, had said the project would create some 5,000 jobs in the region.