TORONTO (miningweekly.com) – The policies adopted by the new government in Colombia will be critical in determining whether the mining sector in the Latin American nation continues to grow the way that it has under outgoing President Alvaro Uribe.

According the Fraser Institute annual mining survey, Colombia has been one of the most improved jurisdictions in the last four or five years as far as general policy and investment attractiveness is concerned.

On June 20, Green Party candidate Antanas Mockus faced Juan Manuel Santos from the Partido de la U in a runoff election, which led to Santos being elected as the next Colombian President.

Sunday's election was the second round after a first round of voting failed to produce a clear winner.

Santos achieved a landslide victory, with 69% of the votes.

Colombia ranked 55 out of 65 mining jurisdictions in the Fraser Institute's 2006/7 survey, but has climbed to 48 out of 72 in the most recent survey, published in April this year.

It is going to be interesting to see how the rankings are affected next year, when the survey will reflect perceptions of the new government, commented Fraser Institute vice-president for research Fred McMahon.

"Uribe was a very good President...he obviously made Colombia a much safer place but there is some question though on how successful he was in building institutions," he said in a presentation at an investment seminar hosted by MineAfrica's On the Ground Group.

The Fraser Institute survey, which sources opinions from hundreds of mining executives and managers, indicates that there are still deep concerns about security in Colombia.

"But I'm personally not sure whether this reflects today's situation, or whether miners with memories of the recent past are not aware of the very great improvements that have taken place in Colombia," McMahon commented.

Security has definitely improved and there is also a lot of misperception from western investors about supposed political instability in the country, commented Macleod Dixon partner Jorge Neher, who is currently based in the country.

Eaglecrest Exploration president Hans Rasmussen agreed that the security situation has improved significantly.

The company is exploring for gold in the country, and Rasmussen himself has visited Colombia several times in the last ten months, he said.

Colombia's most established mining sector is coal, and that industry is very focused and concentrated within the country, Neher said.

There are some potentially large precious-metals projects being explored and studied though, including Greystar Resources' Angostura gold/silver project, AngloGold Ashanti's La Colosa discovery and Ventana Gold's La Bodega project.

Greystar had a bit of a scare earlier this year, when the government suddenly told it to refile an environmental study, but the company successfully appealed against the decision.

McMahon also commented that there is still a possibility that Colombia may consider increasing mining taxes or royalties, as other jurisdictions have already done, to ensure the country benefits from strong metals prices.

But he added that there has been no indication that this is likely.

In fact, depending on the policies adopted by the new government, Colombia is likely to be the next Latin American country to achieve investment-grade rating, Scotiabank senior economist for Latin America Oscar Sánchez said in a presentation.

He expects Colombia's economy will grow by 3% this year, and added that any risk to that figure is most likely to the upside.

Colombia's mining sector grabbed headlines on June 17, when a gas explosion at a coal mine killed some 70 people in one of the country's worst mining disasters.

On Monday, rescuers retrieved at least 30 bodies.