The National Mining Agency (“ANM”) has issued Resolution 1007 of 2023 (“Resolution 1007”), which partially amends Resolution 352 of 2018 (“Resolution 352”), regarding the documentation that must be provided to accredit the economic capacity of bidders for concession contracts or applicants for assignments of mining rights or areas of mining titles (collectively referred to as "Bidders"), as well as the criteria for evaluating the economic capacity. Specifically, Resolution 1007 amends Articles 4, 5, and 6 of Resolution 352.
Pursuant to Resolution 1007, as of December 1, 2023, Bidders must provide the following documentation to accredit their economic capacity:
- Financial statements from the two (2) years before the application year.
- Income tax declarations from the two (2) years before the application year.
- Bank statements from the year immediately before the application year.
- Certificate of shareholding composition of the company.
- Unique Tax Registry.
Regarding the financial statements and income tax return, we highlight that the Resolution 1007 requires to present these documents for an additional year than it was required by Resolution 352. Additionally, the bank statements and the certificate of shareholding composition are new documents introduced by Resolution 1007.
Furthermore, each document must meet the considerations and requirements established by Resolution 1007, subject to correction. If the procedure is not corrected the mining authority will understand the procedure as withdrawn.
In case of foreign companies or individuals, for the execution of the concession contract, they must establish a branch, subsidiary, or affiliate domiciled in Colombia and attach, in addition to the previously listed documents, the incorporation and the commercial registration certificates of said company. It is emphasized that this requirement is not mandatory for the proposal submission but exclusively for the execution of the concession contract.
Additionally, Resolution 352 allowed legal entities under subordination or control to accredit economic capacity by presenting the financial statements of the parent or controlling company. However, Resolution 1007 eliminated this alternative, explaining that "parent companies, which, as cited by the Commercial Code in article 13, do not conduct business activities in the country by themselves and, therefore, do not assume joint obligations before the ANM in compliance with the obligations arising from the mining title".
On the other hand, Resolution 1007 establishes a formula for calculating liquidity and the level of indebtedness for new proposals or titles in the exploration or construction and assembly phase. For the assignments of titles in the exploitation phase and/or mine closure and abandonment, Resolution 1007 establishes a different methodology for evaluating economic capacity. Additionally, the ANM will evaluate the results of these formulas depending on the size of the project.
In addition to the above, Resolution 1007 added the possibility of establishing a trust fund as collateral to meet investment obligations as an additional alternative to accredit economic capacity if the requirements are not fully or partially met. Resolution 352 only allowed presenting a financial guarantee for these purposes.
According to Resolution 352, if an applicant submits more than one proposal or holds another concession contract the Bidder must accredit the remaining financial capacity to guarantee the performance of activities on the new proposal or title. In this regard, Resolution 1007 amends Article 6 of Resolution 352, applying the procedure of remaining capacity to assignments of areas and/or rights and unifying the methodology to calculate it.
The ANM will continue processing contract and assignment applications submitted before Resolution 1007, following the guidelines established by Resolution 352.
To learn more about Resolution 1007, please refer to the following link.