Analysis

The Three-Legged Stool: Why Colombia's Mining Moment Is a Civilization Trade

Nothing Succeeds like Success

By Douglas Thiessen · September 8, 2026 · Originally published on Substack

What just changed in Bogotá

On August 7, 2026, Abelardo de la Espriella took office after the closest presidential runoff in Colombian history, having campaigned on an explicitly market-oriented economic program and the hardest security line the country has seen in decades. Campaign rhetoric is cheap. What's remarkable is the first month.

In its first days, security forces launched a wave of operations against the armed groups that control Colombia's illegal economies. Within three weeks, the government had ended negotiations with three armed organizations, declared every non-state armed group in the country a terrorist organization, and committed publicly to neutralizing ten of their leaders within ninety days. Agree or disagree with the doctrine, the signal to markets is unambiguous: the era of strategic ambiguity toward the groups that tax, extort, and displace legal enterprise is over.

One honest caveat belongs here, because every ESG committee reading this will find it anyway. On September 3, a Bogotá court ordered the suspension of offensive air operations wherever there's credible information that forcibly recruited minors are present; the government is appealing. Investors should quietly hope the guardrail holds. The discount rate this essay is about only keeps falling if the security policy stays inside human-rights limits, because prosperity legitimates force, and force without limits forfeits prosperity. A government that can win while observing that distinction is worth a lower discount rate than one that can't.

But the security offensive is only half the story, and honestly the less interesting half. The other half is what the mining ministry did.

The repeal: re-legalizing the legal

On September 3, at a mining conference in Cartagena, Mining Minister María Nohemí Arboleda announced the repeal by decree of ten resolutions issued under the previous administration that had restricted exploration and extraction across designated zones of the country. The measures, built around so-called mining districts and reserved areas, were sold as environmental and land-use protections. The minister's own assessment of what they actually did is worth quoting in spirit: they were poorly designed, they discouraged investment and exploration, and they dealt a blow to small-scale miners and to the formalization of the sector itself.

Read that again, because it's the crux. The rules didn't stop mining. Colombia sits on some of the finest gold, copper, and polymetallic geology in the hemisphere, and only about 2.5% of the national territory is even covered by mining titles.¹ People mined anyway. By recent estimates, as much as 80% of Colombia's gold production has moved through illegal channels,² financing the ELN, the Clan del Golfo, and the dissident factions of the FARC, while razing some 94,000 hectares and contaminating over 1,100 rivers along the way.³

Let's be precise about the mechanism, because precision is what separates an argument from a slogan. Those ten resolutions didn't create the illegal gold economy, which predates them by decades, and the repeal is expressly prospective; it touches no acquired rights. Their sin was the overhang: the signal that legality itself was negotiable, layered onto a permitting regime already slow and expensive enough to be prohibitive. When legality is a maybe, the man with the rifle is a certainty.

I've spent years writing about the Cantillon Effect, the old insight that proximity to newly created money determines who captures the gains. Colombia's mining restrictions were a Cantillon Inversion in miniature: policy advertised as protecting the periphery that in practice enriched the violent intermediary standing closest to the resource. The campesino digging gold didn't stop digging when Bogotá signaled his valley was off-limits. He just started paying his tax to a man with a rifle instead of a nation with schools.

So the repeal isn't deregulation in the caricatured sense, a giveaway to capital at the public's expense. It's the re-legalization of the poor. It restores the possibility that the same ounce of gold, dug by the same hands, flows through wages, royalties, and treasuries instead of through cartels. (One note of precision: the repeal was announced as government policy and formalized by decree, with the implementing resolution completing public consultation in mid-September. The direction is set; the paperwork is finishing.)

Swiftness as a signal

Investors don't price policy. They price execution. And here the record is even better than the headlines.

The protection orders that Aris Mining, one of Colombia's flagship legal gold producers, had sought for its Segovia operation weren't new. The company had been filing amparo actions against illegal encroachment since 2023; the departmental mining authority granted relief that September, and the national agency resolved further orders in early 2025. The orders existed. They sat on paper, under an administration that wouldn't execute them. On August 23, sixteen days into the new government, the National Mining Agency coordinated with local authorities and the armed forces and enforced them, framing its policy in the process: clear rules and guarantees for those mining legally, firm action against those operating outside the law. An order the last government issued and never executed, executed in sixteen days. That, not any speech, is what a change in jurisdiction actually looks like.

The day before, the minister had traveled to the historic districts of Marmato, Segovia, and Remedios and signed formalization agreements covering 321 traditional miners in Marmato, with a legal pathway established for roughly 450 more at Segovia. The state, communities, and private operators, working the same seam.

Two weeks. In most jurisdictions, two weeks gets you a working group.

The stool: how all three legs get rich

Here's the model, and it's not theoretical. Versions of it are already producing gold and dividends in Colombia today.

Labour. The artisanal miner is not the enemy of formal mining; he's its greatest untapped asset. Formalization agreements let traditional miners work legally on defined areas of a concession under existing Colombian law. An ore-purchase program at transparent, posted prices does something no army patrol can: it destroys the illegal buyer's margin. Add a training ladder, from mucker to certified equipment operator to supervisor, and mining becomes what it was in every society that industrialized successfully: the first rung of upward mobility for people who previously had none. In Colombia's illegal-economy territories today, a majority of the population lives in monetary poverty and most young people are outside the school system.⁴ Those aren't criminality statistics. They're absence-of-alternatives statistics. A formal mine is the alternative.

Government. Every formalized ounce pays royalties and taxes that an illegal ounce never will, and it does so precisely in the municipalities where the state most needs revenue and legitimacy. Legal operations also do something subtler: they extend the state's sensory apparatus. A formalized workforce with a stake in legality is the finest intelligence network and early-warning system a security policy could ask for. Soldiers can protect a site. Only prosperity protects a region.

Capital. And now the part that separates this argument from a charity appeal: the enlightened structure is the more lucrative structure, and not marginally so. Three mechanisms drive it.

First, risk compression. The most expensive line item in Latin American mining over the past two decades hasn't been labor, fuel, or steel. It's been community opposition. Ask AngloGold Ashanti, which held one of the world's great undeveloped gold deposits at La Colosa and watched a local referendum in Cajamarca erase billions in value. A community with equity in the outcome, through jobs, ore purchases, local procurement, and a development trust funded by a slice of production (the Canadian mining industry's Impact Benefit Agreements are the working precedent), is the cheapest insurance ever devised. It converts the population from your largest risk into your largest asset.

Second, the traceability premium. Certified, legal, conflict-free gold commands premiums from Swiss refiners and institutional buyers, while illegal gold sells at a laundering discount. The government is pushing traceability schemes and has even begun purchasing gold directly from small miners to pull supply into legal channels. Formalization doesn't just clean the supply chain. It raises the realized price per ounce.

Third, the cost of capital itself. Streaming companies, royalty financiers, and institutional funds increasingly cannot touch conflict-adjacent assets at any price. Demonstrable social license doesn't just make capital available; it makes it cheaper, and cheap capital compounds faster than any margin ever will.

Run the three legs together and the arithmetic gets almost embarrassing. The same dollar of community investment lowers the discount rate, raises the gold price achieved, widens the investor universe, and hands the government a tax base and a security dividend. Nobody is subsidizing anybody. That's what wealth creation, as opposed to wealth transfer, actually looks like.

The environmental objection, answered head-on

The skeptic's first challenge will be environmental, so meet it in the open: the green argument runs toward formalization, not against it. The razed hectares and the mercury in the rivers are the work of illegal mining, which posts no closure bonds, treats no water, and answers to no regulator. A formal operation with environmental permitting, traceable output, and rehabilitation obligations isn't the threat to those rivers. It's the only realistic remedy, because the alternative to a legal mine in these districts has never been a pristine valley. It's an illegal mine.

And meet the political version of the challenge too, because it has teeth. The repeal of protective-sounding rules will draw legal and activist opposition, and Colombia's own history shows what community backlash can do to capital; La Colosa is the tombstone. That's exactly why the structure in this essay isn't decoration. A project whose neighbors hold jobs, sell ore at posted prices, and draw from a community trust is a project where the consulta popular scenario can't assemble a majority, because the majority has equity in the outcome. Environmental and social credibility isn't a cost center in this jurisdiction. It's the risk-management system.

Botswana, Norway, and the mine-sized state

The second challenge writes itself: fine words, but Colombia isn't Norway. Correct. Norway had strong institutions before it had oil; its sovereign fund is the fruit of trust, not the seed of it. The better analogue is Botswana, which at independence was among the poorest countries on earth and, through a genuine partnership between the state and private diamond capital, delivered decades of the fastest sustained growth in the world. Government, capital, and population got rich together, on purpose, by design.

But there's a deeper answer. Where national institutions are still being rebuilt, the mine site itself becomes the unit of good governance. A well-run formal operation imports the Norway principles at local scale: transparent revenue, enforceable rules, shared benefit. It's a micro-state of credibility, and credibility is contagious.

There's a reason mining, of all industries, can run this experiment, and it's the most underrated fact in resource economics: the asset can't leave. A factory can relocate when conditions sour. Software capital can vanish over a weekend. A Colombian gold deposit stays in Colombia for as long as Colombia exists, and the capital sunk into developing it is a hostage. A hostage, as any student of contract knows, is the oldest credible commitment there is. Because the operator can't walk away, its promises to workers and communities are believable in a way no footloose employer's ever are. Because the ore body will outlast every mayor and most presidents, the mine, the community, and the state are locked into a repeated game with one another over decades, and repeated games are precisely where cooperation becomes rational and trust gets manufactured, one honored agreement at a time.

Notice what that does to the development textbook. The conventional sequence says you need a strong state first, then rule of law, then investment, then development. Immobile capital runs the causality in reverse: formal investment creates local rule of law, local rule of law creates an economic constituency for legality, and that constituency, multiplied across enough valleys, builds the stronger state. Institutions don't have to arrive top-down from Bogotá. They can be assembled bottom-up, mine by mine, by people with a durable stake in the rules holding. Enough of them, and the country risk premium that opened this essay starts to fall for everyone, which is the closest thing finance has to a definition of civilization.

Colombia has the geology. It now has a government moving with a speed that has surprised even the optimists. What it needs is capital willing to understand that in this jurisdiction, at this moment, doing well and doing good aren't competing objectives. They are, quite literally, the same number.

The author is a founding partner of Taurean Global Advisors, which works with investors and operators building formal, compliant mining ventures in Latin America.