October 31, 2018

Interview to Guillermo Fonseca, President of Cerrejón

Starting this week, Guillermo Fonseca Onofre assumed the position of President of Cerrejón and in his first interview as such, he shares with us his insights about the company and the mining sector in Colombia.

Who is Guillermo Fonseca and what is his experience before this new role?

I am an economist with more than 30 years of experience in the hydrocarbons sector, working with such companies as Shell, BP, Talisman and, before joining Cerrejón, Hocol, an affiliate company of Ecopetrol devoted to the exploration and production of hydrocarbons, which I led during five years, and to which I am very grateful.  I believe that people are the main asset of organizations.  For that reason, my highest expectation in Cerrejón is to learn, both from the coal production and exportation activity – which in my opinion has enormous value and potential for the country – as well as from the nearly 6,000 people that form the working team.  Without any doubt, one of the things that has called my attention is the perception of the pride, commitment and passion that characterize Cerrejón’s personnel.  This company has significantly contributed to the country’s economy; and being part of a team from whom I have noticed the largest commitment to carry out a safe, integral, responsible operation for its impacts, which is committed to the development of its communities and its collaborators, fills me with pride and satisfaction. By assuming this position, I hope to contribute, from my knowledge and experience, to the legacy that Cerrejón has been building throughout its three decades of operation.

Which are the main challenges that, in your opinion, the mining sector in Colombia currently faces?

Mining is an activity developed in the middle of complex environments, characterized by a high price volatility and uncertain market conditions that are outside our control. In this sense, our priority is to maintain competitive conditions in the operations, which in addition requires legislation and clear rules, necessary for the medium and long-term decision-making, and to attract investments into the country.  A significant challenge we have is to overcome misinformation, which may polarize the debates and impede the use of benefits derived from the mining industry.  For that purpose, it is important to foster the transparency and openness of our operations, promoting informed conversations around this activity.  I consider that, in addition, the industry has the challenge of making more visible the positive impacts it has historically had, the significance that it represents for public finance and territorial development.  Mining represents nearly 20% of the country’s royalties; this amount may quickly increase with the viability of the mining projects.  Even more importantly, the sector must highlight the future potential it represents to continue contributing to a country that has to attend so many needs.  From Cerrejón, we are open and ready to have constructive dialogue to find formulas that combine objectives from all parties involved.

Which is your perception of the world coal market?

First, we must recognize that the world is transiting towards energy sources with lower impact on global warming.  While this transition consolidates, international forecasts show that coal is, and will continue to be, an important source for electricity generation in the world, currently representing nearly 40% of the global energy basket.  Projections of the International Energy Agency (“Agencia Internacional de Energía”) state that the world’s energy needs will increase 30% by 2040, which implies adding another China and another India to the current demand. Although other sources have gained relevance, coal will continue to play a fundamental role of the global energy mix and shall be a strategic ally to promote the world’s development and to make possible access to electricity for more that 1,000 million people who currently do not have it.  Colombia and Cerrejón play a fundamental role in the provision of this supply.

What opportunities do Cerrejón’s mining activities represent for La Guajira?

In 0.7% of La Guajira’s territory the mining activity generates more than 40% of the state’s GDP, dynamizing the regional economy through the generation of 6,000 direct jobs, productive chaining, investments and tax contributions. I am convinced that an articulated work between the different actors present in the territory, including Government, companies and community, is the fundamental pillar to achieve the necessary transformations that contribute to improving its population’s living conditions and to leverage the territorial potentialities, including among others, access to water, the development of transportation infrastructure, the large alternative-energy projects, and the revitalization of tourism. We, together, must take advantage of the competitive advantages represented by its strategic geographic location, its natural resources, the wealth of its culture and its extraordinary biodiversity.  Also we, together, must identify different and new ways of interacting that take us to the next productive-impact level in the region.

In turn, I am sure that the “Works for Taxes” and “Works for Royalties” mechanisms will be great enablers to achieve high-impact investments in the region during next years.