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Colombian government organizations on Monday signed a memorandum of understanding during a joint press conference in capital Bogota to create a national mining company out of assets seized from illegal groups, to tackle mining-related pollution and help small-scale miners.

The government of Colombian President Gustavo Petro – the first leftist to lead the country – has pledged to reform the mining sector, ruling out more licenses for large-scale open-pit coal mines as it focuses on minerals that are important for the energy transition, such as copper.

The memorandum of understanding was signed by the National Mining Agency (ANM), Colombia’s Ministry of Mines and Energy, and the Special Assets Society (SAE), a government fund which manages assets seized from illegal groups to compensate victims of Colombia’s internal armed conflict.

The three parties will now look at how to establish the new state company, SAE director Jose Daniel Rojas told journalists.

“We’re going to start joint work groups in which we are going to begin developing the proposal technically,” Rojas said at a press conference in Bogota, before joking that deciding on a name would be one of the more difficult aspects of establishing the new entity.

The national mining company – to be created out of two gold trading companies currently under control of the SAE – will buy gold from small scale miners who produce the yellow metal without using cyanide or mercury, with the aim of exporting environmentally friendly gold to Europe, ANM President Alvaro Pardo said last week.

Neither the ministry, SAE or ANM had details on when production or exports by the new company would begin.

“We hope to be back soon, giving you some details about how we are going to make this possible for the good of citizen miners,” said Minister for Mines and Energy Irene Velez.