Colombia and Australia offer advantageous commercial conditions for expanding businesses and opportunistic entrepreneurs. Classified as megadiverse, these two nature-rich countries house a wealth of mineral resources that form strong pillars of their economies.

In particular, these countries have each carved out prominent positions in the global market for precious stones. In Australia, the focus lies on opals, whereby the country provides 90% of the world’s supply. Colombia’s emeralds, on the other hand, are world-renowned for their clarity and colour.

Unique and valuable opportunities exist for companies with transferable mining capabilities to find connections and expand across these prosperous industries.

Economic strengths and symmetries

Pro-business attitudes, positive growth and political stability are shared elements of Australian and Colombian business environments. As of 2016, Australia’s total wealth reached an exceptional AU$8.9 trillion. Real GDP grew another 2.9% in 2017-18, demonstrating a positive growth trajectory that this country has held for 26 consecutive years.

Also enjoying a period of stabilized growth, Colombia’s GDP is expected to grow 3.0% in 2019, and another 3.2% in 2020. This impressive statistic illustrates Colombia’s emergence as one of the region’s largest economies, with a GDP valued at US$309.2 billion.

Australia and Colombia share key economic characteristics, including strong agricultural and mining industries. Both are notable world providers of commodities in both sectors, reflected in their exports to key trading partners. Colombia’s reserves in nickel, gold, platinum, coal, silver, and copper complement Australia’s extensive mining matrix, which also includes iron ore, aluminium, zinc, uranium, and many others.

Precious stone prowess

These primary industry powerhouses are endowed with some of the highest levels of biodiversity in the world, and as such have nurtured formidable reputations in their mineral outputs. In the context of precious stones, Australia and Colombia come out on top of world rankings in two main areas: opals and emeralds.

Monopolized opal market

Australia has been leading the way as the world’s largest supplier of opals since 1930. The dominating opal miner sources around 80% these colourful stones from South Australia. In 2018, total opal production reached a value of AU$16 million. The country’s Department for Energy and Mining suggests that areas such as the Mintabie Precious Stone Field hold around AU$4 billion worth of opal reserves. Opals come in a variety of colours, making for a versatile jewellery component that can cater to diverse preferences. As the stone’s quirky and varied aesthetic garners further attention from the global fashion world, this value is expected to rise.

While this stone dominates the country’s gem industry, it’s worth noting that Australia is also famous for its diamond, sapphire and jade deposits. In the marine environment, the South Pacific island nation also fronts up a covetable source of pearls.

Lucrative emerald opportunities in Colombia

Colombia’s emeralds are the most sought after in the global market. The nation’s geography – in particular, the Andes mountain range – allows an environment that produces a more intensely coloured green in its emeralds. The process of emerald ‘mineralization’ in Colombia includes hydrothermal activity, whereas most other emerald deposits in the world form the valuable stone from magmatism. It’s this hydrothermal injection process that produces emeralds with greater saturation.

These stones are in hot demand globally. Thanks to its colour and clarity, a Colombian emerald can fetch up to US$90,000 per carat on the world market. Sustained foreign investment is now creeping into this industry, as further exploration opportunities are highlighted by the government’s efforts to build transparency, consistency, and supportive legislative frameworks for foreign actors.

Earlier this year, Colombia’s government announced its intent to standardize the mining concession permit system, as a further step in reducing barriers to entry for exploration countries.

Transferable mining capabilities

As top performers in mining, Australian firms are well-placed to provide key services and innovative technologies to Colombia’s developing mining sector.

Australia fosters a strong equipment, technology and services (METS) element in its mining capability, where a network of providers and companies peripheral to mining operations are engaging their technology with new partners in new markets. High-level support received from the government in this area drives further development, cooperation and innovation in local mining and METS companies. This is an incredibly advantageous position for Australian firms, who have much to offer their Colombian counterparts.

Colombia’s mining industries, like many others in Latin America, contend with challenges in developing sustainable practice and clear communication and consultation with the public. Often, indigenous communities living in Colombia’s rural regions can be directly affected by mining activities. Emeralds are no exception; though many are involved in exploration phases of seeking out the gem, eventually these activities will need to progress into extraction, and expert guidance is highly sought after on extraction best practices.

Australia’s mining and mining-related companies are therefore in an optimal position to consider diversifying their customer base, and export their expertise over to the Latin American region. Though the physical distance of this region may impose extra shipping/traveling expenses for these firms, the advantages of reaching a market in high demand for technological improvement in precious stone exploration and extraction offer highly beneficial opportunities for early movers.

Thankfully, the governments of these two countries are also working to build strong bilateral ties to support and enable this cooperation.

Strengthening bilateral relationship

These two governments have recently initiated a process of seeking out opportunities for greater bilateral cooperation. In an Australia-Colombia policy dialogue held in Bogotá in June, academics, public officials and commercial actors joined ranks to discuss several areas of interest and potential to strengthen relations and bridge the Pacific gap. One such subject was in mining.

Despite already having an agreement amongst themselves for cooperation in both the mining and hydrocarbon industries since 2014 and 2016 respectively, these two countries are looking for more. As international interest in the rapidly-developing region grows, and an increasingly uncertain global economic context prevails as a result of trade conflicts, governments are looking to their Latin American counterparts to diversify trade relationships and seek new opportunities.

The diverse range of options and well-established authenticity of Colombian and Australian precious stone markets offers miners lucrative opportunities to engage with these industries, with prospects of long-term success.