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Unexpected Countries Could Rise As Latin America's New Mining Champions

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Unexpected Countries Could Rise As Latin America's New Mining Champions

After a two-year-long rut, the Latin American mining sector is finally staging a rebound. In a recent article, Mining.com’s Cecilia Jamasmie shared an interesting view regarding who the winners of this recovery will be, and it’s not the usual suspects but two rather embattled economies in the region: Brazil and Peru.

According to BMI Research, neither the countries’ political instability nor the operational risks related to it are enough to offset the opportunities provided by Peru’s large project pipeline in copper, or Brazil’s competitive iron ore industry. Having said this, the firm noted that the long-standing mining leader in the region, Chile, will maintain its spot as the front-runner, especially in the copper segment.

Finally, the report pointed out that Argentina’s new pro-mining president should help it regain some of the ground lost during the previous decade, as a more socially and environmentally-concerned government ruled the country. However, the road to recovery will not be an easy one, the experts added.

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“Despite holding rich deposits of copper, gold, silver, zinc and lithium, local regulations are tough — seven of the country's 23 provinces currently ban open-pit mining altogether due to environmental concerns,” Jamasmie article explicated.

Not For The Risk-Averse

Having said this, BMI’s report went on to warn investors about some of the risks, which include illegal gold mining, a turbulent labor market, underdeveloped infrastructure and tightening environmental regulations. The risk heightens in Venezuela and Central America, the analysts added, while Chile, Colombia, Mexico and Brazil offer more developed infrastructure, and thus, more limited risk.

Some Companies To Look At

A few mining companies that operate in Latin America include:

  • BHP Billiton Limited (ADR) (NYSE: BHP).
  • Vale SA (ADR) (NYSE: VALE).
  • Companhia Siderurgica Nacional (ADR) (NYSE: SID).
  • Ternium SA (ADR) (NYSE: TX).
  • Rio Tinto plc (ADR) (NYSE: RIO).
  • Antofagasta plc (ADR) (OTC: ANFGY).
  • Usinas Siderurgics d Mns Grs SA Usms-ADR (OTC: USNZY).
  • Anglo American plc (ADR) (OTC: NGLOY).
  • Grupo Mexico S.A. de C.V. (USA) (OTC: GMBXF).
  • Paranapanema SA (ADR) (OTC: PNPPY).
  • Barrick Gold Corporation (USA) (NYSE: ABX).

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above, nor was this article conceived as investment advice.

 

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