Cerrejón, one of the world’s largest open-pit coal mines located in Colombia, was supposed to have time. Its concession runs until 2034, its railway and Caribbean port still anchor La Guajira’s formal economy, and its coal continues to generate jobs, royalties and local spending. Yet the government’s request for Glencore to begin closure discussions has turned a future transition into a near-term investment test. The question is no longer just when Colombia moves beyond coal, but whether it can do so without unsettling legal certainty, regional stability and long-term capital.

The market signal is troubling. A former senior official at the Ministry of Mines and Energy in Colombia described Cerrejón as “the tip of the iceberg of something much larger, namely the way the world is looking at the risk of investing in mining in Colombia.” The issue is whether a concession signed until 2034 can be shortened by political pressure. As the former official explained, this touches “the most sensitive issue there is for anyone putting in long-term capital is certainty over the term.”

 “[CERREJÓN IS] THE TIP OF THE ICEBERG OF SOMETHING MUCH LARGER, NAMELY THE WAY THE WORLD IS LOOKING AT THE RISK OF INVESTING IN MINING IN COLOMBIA.”

A former senior official at the Ministry of Mines and Energy, Colombia

Glencore was not blindsided by the commercial direction of travel. Cerrejón’s “decline is already underway,” commented a consultant and adviser to the private sector, with production falling to 16.8 million tonnes in 2025, from 19.2 million tonnes in 2024 and 22 million tonnes in 2023. Glencore had already announced production cuts in March 2025, partly because seaborne thermal coal prices had become “unsustainable”. The downturn was therefore not caused by government pressure alone. Market pressure is now being compounded by policy risk.

What Glencore may not have expected was the political acceleration. When capital feels “the ground shifting under its feet … it goes to arbitration,” remarked the former ministry official. Once concession terms appear politically elastic, investors “reassess everything and take the money to places where the rules are more stable.”

The regional stakes are acute. In 2025, Cerrejón reported more than 12,000 direct employees and contractors, COP 673 billion in royalties, COP 79 billion in local taxes and COP 87 billion in social investment. “Cerrejón in La Guajira is not just another company,” remarked the private-sector consultant. “It is practically the anchor of the formal economy in one of the poorest departments in the country.” An early, disorderly wind-down would be “a concentrated sectoral shock,” knocking “the floor out from under an entire region in one blow.” The consultant estimated that, in a normal year, Cerrejón generates around USD 160 million to USD 170 million in royalties, alongside substantial local procurement.

The replacement economy looks attractive on paper. The Colectora line is designed to connect La Guajira’s wind potential to the national grid, while Ecopetrol has expanded into assets including the Jemeiwaa Ka’I wind cluster and Statkraft’s Colombian portfolio. Yet execution remains the constraint. Colombia has potential for up to 18GW of wind power, but only two wind farms were partially operating in 2025, with combined capacity below 32MW. Enel withdrew from Windpeshi and EDP exited projects in La Guajira, underscoring the gap between resource potential and bankable delivery.

As the former ministry official observed, “Several of the proposals sold with the greatest fanfare had neither technical structuring nor a financial model to support them. Private investors can smell that from miles away.” Interest, in short, has been “rather lukewarm.”

“SEVERAL OF THE PROPOSALS SOLD WITH THE GREATEST FANFARE HAD NEITHER TECHNICAL STRUCTURING NOR A FINANCIAL MODEL TO SUPPORT THEM. PRIVATE INVESTORS CAN SMELL THAT FROM MILES AWAY.”

A former senior official at the Ministry of Mines and Energy, Colombia

This is the central commercial problem. Renewables, transmission, logistics, critical minerals and industrial development can all form part of La Guajira’s next economy, but none can quickly replicate Cerrejón’s fiscal, employment and procurement footprint. “No one fills a gap of that size quickly,” asserted the former ministry official, because “each alternative limps in a different way.” Renewables “consume a lot of capital when they are being built and provide very little employment once they are operating.”

President-elect Abelardo de la Espriella’s narrow victory on 21 June has shifted expectations but not removed uncertainty. He won with 49.66 percent against Iván Cepeda’s 48.70 percent, while his movement holds only five seats in the legislature. One expert source in country commented that mining and energy associations backed him to “restore confidence, halt the managed decline of coal and sustain Cerrejón’s contribution until the concession expires.”

Yet the result is not a blank cheque. Long-term capital “does not buy direction. It buys predictability and a solid fiscal position,” the source warned. The risks are governability, fiscal pressure and the possibility that dismantling technical agencies could multiply disputes rather than reduce red tape. According to the same source, the new government’s fiscal draft proposes cutting the state apparatus by around 40 percent, or roughly COP 20 trillion. “Legal certainty is not decreed by abolishing regulators. It is built with firm rules and technical arbiters that people trust,” confirmed the consultant.

The next administration has “a real window to re-anchor expectations and preserve what already exists until the concessions expire,” the former official argued. But that window will only translate into investment if pro-market rhetoric is backed by predictable institutions, fiscal discipline and credible technical dispute resolution. Colombia’s transition will not be judged by how quickly coal is pushed out, but by whether the country can build what comes next without breaking what still holds La Guajira together. Without that, the risk is what our sources called “a crude shock:” a transition in theory, but a hard landing in practice.