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AngloGold suspends Colombia project after anti-mining vote

BOGOTA (Reuters) - South Africa's AngloGold Ashanti (ANGJ.J) has halted all exploration work at its La Colosa project in central Tolima, Colombia, after voters backed a proposal to ban mining in the municipality, the company said on Thursday.

The decision comes amid legal wrangling over environmental regulations and community opposition that have worried investors and prompted the mining minister to promise a new law to reconcile central government-granted mining permits with local and judicial concerns.

The company, which has been carrying out exploration work at the site outside of the town of Cajamarca for 14 years, said in a statement it "accepted" the result of last month's vote.

"Diverse reasons which range from the institutional, the political and particularly the social, with the recent referendum, oblige us to take the unfortunate decision to stop all project activities and with it all employment and investment, until there's certainty about mining activity in the country and in Tolima," AngloGold said.

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The Tolima vote was made possible by a Constitutional Court decision that overturned the national government's sole authority to approve mining projects, allowing mayors and provincial governors to challenge exploration permits, to the delight of environmental groups and some politicians.

The La Colosa project had a potential investment of $2 billion, the company has said, and could yield 28 million ounces of gold. A huge majority of Cajamarca residents - 98.8 percent - voted against allowing mining in the referendum. AngloGold has invested some $900 million in Colombia since 2006 and La Colosa was the largest of its three projects in the country.

The company said it would continue to seek constructive dialogue about mining in the country.

Colombia is the world's fifth-largest producer of coal and has rich deposits of gold, ferronickel, silver, copper and emeralds.

Community votes are not the only concern for investors - Canadian company Eco Oro Minerals Corp (EOM.TO) is waging a legal battle against a court ruling that bars exploration in half its concession in an effort to preserve high-altitude wetlands.

(Reporting by Julia Cobb; Editing by Chris Reese)