What we do?

This study analyzes China’s role in Colombia’s just energy transition. It addresses the socio-environmental governance challenges stemming from the country’s position in the mining supply chain and examines China’s involvement in energy and economic diversification policies in the solar energy and electromobility sectors.

As background, it is noted that China’s historical economic presence in Colombia has been late and marginal. In 2002, it began to become more active thanks to investments in the oil sector. Since 2019, the arrival of the first solar energy projects, the commissioning of the only two Chinese mining projects, and the signing of letters of intent for cooperation in the energy transition and mining, have created a scenario of strategic change in the relationship between the two countries and of China’s contribution to Colombia’s just energy transition. Despite an increase in Chinese Foreign Direct Investment (FDI) since 2020, Colombia is not yet a significant destination for Chinese investment in Latin America, and the aforementioned increase is not due to preferential treatment by the Colombian government compared to other foreign companies.

The analysis was conducted along two lines. The first explored the mining dimension of the energy transition using the example of Zijin Continental Gold’s Buriticá gold mine. This involved analyzing compliance with social and environmental regulations and the adoption of environmental, social, and governance (ESG) performance standards, as well as due diligence guidelines and voluntary principles as foundations for achieving a just energy transition. While gold is not classified as a transition mineral, the Buriticá analysis establishes an early precedent for the challenges of mining governance for future Chinese investment projects focused on strategic minerals in Colombia. Similarly, Zijin is a case of comparative interest because it is a transnational corporation with a presence in the copper and lithium sectors in other countries in the region. Regarding the second focus, the contribution of Chinese investments to Colombian energy diversification and productive transformation was reviewed through wind energy and electromobility projects involving Chinese companies.

It was found that, although Zijin tends to comply with Colombian environmental and social standards and regulations, and has robust and ambitious ESG programs aligned with international standards, structural deficiencies in mining governance, the distorting effect of illegal mining and armed groups on mining governance, and the limited scope of ESG policies restrict the company’s capacity to contribute to building a just energy transition. In the case of energy and production diversification, despite the existence of industrial transformation plans and the interest in involving China in the energy transition, Colombia has not made progress toward these objectives, nor have effective strategies been developed to integrate Chinese investments into national value chains. Consequently, Chinese investments remain limited to energy provision without the integration of regional manufacturing capabilities.

It is concluded that: first, although China presents opportunities for the energy transition in Colombia, current deficiencies in mining governance carry the risk of multiplying territorial conflicts related to mining and energy; and second, that the conditions are not in place to translate Chinese investment into local productive transformation for the energy transition. To achieve this, it is necessary to understand the conditions regarding territorial specificity, cultural adaptation, and institutional frameworks that optimize Chinese investments oriented toward national development objectives, while simultaneously guaranteeing principles of a just transition.

To improve cooperation on the energy transition between Colombia and China, a comprehensive framework is proposed that includes: strengthening environmental governance, reporting on social and environmental governance impact indicators, promoting genuine economic diversification, improving intercultural relations, conditioning financing on socio-environmental and economic diversification standards, and creating independent monitoring mechanisms. The need for differentiated policies that consider territorial specificities is emphasized.