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Latin America plays a major role in the global mining industry. Its leading position is based, firstly, on its huge geological wealth, on the quality, quantity and diversity of its natural resources. Thus Chile is the world’s largest producer of copper and nitrates; Peru is the world’s leading silver producer and the second largest producer of copper and zinc and is ranked sixth in gold production globally; Mexico is another major player in silver; meanwhile Brazil is one of the world’s leading producers of iron ore.
The plethora of resources has attracted a hefty share of international investment in mine exploration to the region. Of the US$7.32 billion spent on exploration in 2009, 26% went to Latin America, with Peru, Mexico, Chile and Brazil all ranking among the top ten destinations for exploration spending. Similarly, the world’s largest mining companies, including BHP Billiton, Rio Tinto, Anglo American, Xstrata and Barrick are all active in the region with mines and projects, as are the world‘s major engineering firms and equipment suppliers.
But the region’s attractiveness is not based solely on its mineral reserves, however important they may be, but also the climate of transparency and stability that some countries in the region offer to investors. These are critical factors for an industry based on huge long-term investments.
The multi-billion dollar portfolio of projects lined up for the coming years in Chile and Peru, two traditional mining countries that see the industry as a stepping stone for development, are also the result of the favorable conditions established to ensure the sector remains dynamic. In Chile alone, mining companies plan to invest almost US$50 billion in green-field and brown-field projects through 2015; in Peru, investment in exploration, production and mine expansions is forecast to exceed US$35 billion over the coming years. Argentina and Colombia are set to follow this trend, both increasingly convinced of the potential social and economic development that a serious and sustainable mining industry could bring.
But Latin America’s place on the international mining scene is not limited to being a mere exporter of natural resources. Today the region has companies that have become industry leaders by expanding into new markets. These include Brazil’s Vale, which has become a true global giant; Chile’s Codelco, the world’s largest copper producer, and Antofagasta Minerals, which recently sealed its participation in a major exploration project in the United States.
In addition, a series of companies, based in the region - Mexican, Peruvian, Brazilian – have become dynamic promoters of new projects. Peru’s Compañía de Minas Buenaventura (featured in this issue) is a case in point.
Thus the region’s countries and its mining industry have formed a mutually-beneficial relationship that is mature and based on clear rules, that generates wealth and social and economic well-being, especially for local communities.
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