May 28, 2014 from Robin Bromby
On the "Latin America Down Under Conference " Latin American representatives of financing houses and geological institutes, as well as high-ranking politicians from Mexico, Peru, Colombia, Venezuela, Bolivia and Nicaragua are meeting in Sydney to increase interest in Australian companies. The visitor list reads like a Who's Who of the Latin American mining sector.
Traditionally, US and Canadian companies dominate south of the Rio Grande. That is changing: a large number of Australian companies are already active there and the Chinese are also in the starting blocks.
Perhaps it is time to remember how important the region is not only to mining in general, but to various commodities of great interest: potash, rare earths and now also tin from Brazil, uranium from Argentina (important for the Development of the nuclear industry), tin from Peru and platinum from Colombia.
Colombia was the only major source of platinum in the West when the 1917 revolution struck Russian exports from the field. During the Second World War, Latin America became an important cog in the Allied machinery. Washington was able to use its money and political power to crush Japanese and German interests from 1939 and secure its monopoly on mineral exports from South America.
Many of the countries are rich in gold and silver and, as an Australian company showed this week, there are still big finds. Beadell Resources - ASX: BDR - reported 19 meters at 62,8 g / t gold including a 7 meter interval at 162,8 g / t gold; this is the kind of result that would have led to a gold rush 150 years ago. Note that the four largest mining companies in North America, along with Anglogold Ashanti, have reserves averaging 1,1 g / t.
Latin America produces 45% of world copper, 50% of silver, 26% of molybdenum, 21% of zinc, and 20% of global gold production. According to Latin American consultant Jose Blanco, based in Sydney, Latin America was 2013's leading mineral investment destination, attracting 27% of 2013's worldwide spend.
However, there are problems as well. Peru demands greater social responsibility from mining companies that intend to operate in the country. Bolivia must overcome the erratic policies of recent years (as well as Ecuador). Guatemala was a disappointment and parts of Colombia are still entering at their own risk.
But things are getting better and better, and politicians are becoming increasingly aware that they should be attractive targets. Therefore, Nicaragua is also present here in Sydney and delegates even talk about Cuba.
"Discover the mining possibilities" was the message of the Nicaraguans at the conference on Latin American mining. They tried to establish their abundant natural resources as well as their pro-business government (major shift from the Sandinista years), solid legal framework and generous tax incentives together with a skilled, available workforce and "high personal security". The Central American state exported gold worth $ 436 million last year. The delegation stated that less than 10% of the country has been explored.
And did you know that Cuba is supposed to be friendly to mountain farmers? Two months ago, Cuba's National Assembly halved its profit tax (to 15%), although other tax benefits are only available for joint ventures with state-owned Cuban companies. However, there is great skepticism as to whether the spirit of the new guidelines is actually being realized and the reasonable suspicion that this is not the case.
But Cuba is important for one metal: nickel, with great resources of nickel laterite. That should be watched, as should the entire region.
