All You Need to Know About Latin American Mining

Latin American Mining

Latin America is an economic powerhouse in many industries but has long developed its prominence in the mining industry. The Latin American countries have since reached the leading ranks of global output of a wide range of metals and extracts with the first reports of commercial mining of minerals in the region going back to the early 16th century, under Spanish and Portuguese colonial dominion.

Key to Prosperity

The specialist advocates building on strengths as a tactic to achieve economic development and overcome poverty. These are the mineral materials in Latin America. The main challenge, therefore, is to enhance the lives of the people who live in a country with rich, but low biodiversity.

Latin America’s success is mostly due to the wealth of its countries. Moreover, the involvement of a responsible industry provides legal resources, employment, protection, community responsibility and social development for these countries.

The natural resources have their attributes practically as a “golden chance.” For example, the extractive industry is encouraging new technology as new drilling systems, environmental innovation, new biofuel technology, efficient links, promotion of small to medium mining, optimisation of green businesses, and more in terms of innovation.

Latin American Metal Wealth

Latin America is still distinguished in the production of precious metals despite its strong exploitation for silver and gold during the European colonisation for more than 300 years. The biggest silver mines in the world are in Peru while Mexico ranks 6th. Along with Chile, Bolivia and Argentina, both countries accounted for over half the quantity of silver produced in the last 5 years in the world. Likewise, Peru, Mexico and Brazil are among the leading countries which produce gold.

Latin American Mining

An Empire of Copper

Irrespective of its background of precious metal operational activities, Latin America’s metal empire in the 21st century consisted of copper, which is mainly manufactured by eight of the 10 leading mining companies in the country. In 2019, Chile, the largest producer of copper worldwide, accounted for 28% of global demand, exceeding that of the next top three. And there is no indication that the country is dominant in the COVID-19 pandemic, which in the first half of 2020 has steadily increased Chile’s monthly copper production above that of last year.

On the other hand, the world leader Peru faces another story. Although the yearly production of Peruvian copper over the past decade has increased steadily, the country has suffered greatly from coronavirus, with copper production shutdowns and declines in the first four months of the year as opposed to 2019. Also, the biggest corporations had a significant effect on their results in April 2020.

A Diverse Portfolio

However, more than a few metals are the product of Latin America’s mining success. Brazil is among the top five in terms of bauxite output in the world market. The mining industry in Brazil nevertheless has prominence. In 2019, the state was the world’s second-largest producer of iron ore mining, producing nearly half a billion tonnes. The area of Latin America has also maintained the latest trends. Chile and Argentina are the world leaders in lithium production with more than 60% of the world’s reserves.

Latin American Mining

Latin American Mining Potential and COVID-19

COVID-19 effects observed in all areas: for industries such as tourism and manufacturing in extreme ways; and less specific but no less significant for sectors such as mining. 

It is not surprising that nearly all industries have seen greater predicted country risk losses. This is particularly valid because of global recession forecasts and chances of strikes and demonstrations. The sectors with the highest growth in the world’s average Country Risk Prime (CRP) were hydroelectric power. Automotive and onshore gas – 0.24%, 0,19% and 0.10%, compared to a combined average of 0,08% for ten sectors in our model. Those sectors also enjoyed by 1.58%, 1.84%, and 1.42%, the largest average increases in NPV loss compared to a base case outside country risk.

Best Time to Invest in Latin American Mining

The pandemic would be beneficial for Latin American metals mining. Investors have switched to gold during the economic downturn, making the yellow metal a new record. In the meantime, pre-pandemic copper prices have eclipsed sponsored by incentive measures in the EU and China.

Latin American Mining

There are several reasons to invest in Latin American Mining:

Huge Region

Coronavirus’ immediate effects on Latin American mines were devastating. Latin America is nearly 13% of the Earth’s surface. It is comprising 20 sovereign States and various alliances occupying a surface of over 20 million square kilometres. There are some 650 million citizens with US$5.600 billion of collective GDP growth. The region consists of all Portuguese and Spanish speaking countries in the south of the United States, basically all territories which once were part of the empires of Spain, Portugal or France.

Common Languages

Around 60% of the population speaks Spanish as a first language and another 34%  speak Portuguese. French is the language in Haiti and Guadeloupe, Martinique and Guyana, French overseas departments.

Historic Attraction

Over the years, foreign investors have been captivated by Latin American mining. Tales of Birú, a magic gold-laden nation (gold-laden land of Peru), were enough for the conquerors to persuade them to embark on a dangerous Inca expedition. Investors, especially for the mythical El Dorado, have continued to scrub the area since.

Geology of the Future

Particular mineral blessings occur in Chile, Peru, Brazil and Mexico. Chile has both copper and lithium in its main reserves. The seventh biggest silver reserves in the world, according to the US Geological Survey. Peru has the world’s biggest reservations of silver, copper third, zinc third, nickel fourth and gold fifth highest. Mexico, in zinc, plum and copper respectively, is fourth, fifth, and sixth; as well as becoming the top ten gold manufacturers. Brazil has the second-biggest iron ore reserves in the world. The third biggest nickel resources and the fourth highest in the world.

Excellence in Operations

Many of the world’s largest mines are found in Latin America. The area was ranked four mines last year in the top ten rankings. According to SPGMI, in terms of absolute profit margins in U.S. dollars, as an annual production minus all-in sustainability costs. These are the Northern System of Vale and the Iron Ore Farm Serra Sul in Brazil, the Chilean Escondida Copper Factory of BHP and the Peruvian Antamine Antamina.

Wrapping Up

In Latin America, Covid-19 struck more than anything else. But the extremely competitive mining industry in the region looks set to gain considerably over the next coming years. In recent surveys, the area has consistently increased its “investment appeal” ratings, which is remarkable.


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