Business Risks of Mining in Latin America

Most miners know that Latin America's major mineral areas are in the mountains of Mexico and down the backbone of the Andes in South America. These areas comprise some of the more rugged and challenging parts of the world's geography, and the risks of doing business in these areas are just as difficult as the impressive task of extracting and processing ores. However, Latin America does contain mineral deposits, some untouched and many to be discovered, that convince venturesome people that the tremendous effort required to mine them will be worthwhile. The rewards have often been adequate in the past. Hopefully, they will be in the future. Background The safest statement that can be made about Latin America is that the "ballgame is constantly changing." Here are some examples: Chile. Under President Frei in the 1960s, Chile welcomed foreign mining interests, even though the government was acquiring significant ownership interests in the big copper properties. Then, under Allende in the 1970s, the big mines were taken over and compensation was denied on various grounds including the allegation that extraordinary profits had been made that should have been taxed. After Allende, an about-face was made in policy; former owners of the expropriated mines received some compensation and new foreign investment was seriously welcomed. Many major companies announced intentions to return to Chile. Some have. Peru. After a military takeover in 1968, Southern Peru Copper