Latin America Mining Risks Carry $54B Price Tag

Latin America's mining industry has been plagued by above-ground risks that have cost or stalled over $54 billion in investments since 2018. This figure, estimated by Americas Market Intelligence (AMI), includes $38 billion in documented losses and $16 billion in capital frozen due to delayed or halted projects.

The largest single loss is attributed to the 2015 Mariana tailings dam disaster in Brazil, where BHP, Vale, and Samarco agreed to a settlement valued at $31.7 billion. Regulatory disputes have also tied up billions of dollars in planned investment, with about $7 billion in Peruvian copper projects stalled by social opposition, regulatory uncertainty, and illegal mining.

Experts warn that the $54-billion estimate should not be seen as a measure of the region's overall investment appeal. Latin American countries differ significantly in their mining industries' maturity, infrastructure, institutions, security, and regulatory trajectories. The challenge differs by jurisdiction, with Chile's lengthy approvals weighing on new mines and expansions, while community relations and illegal mining can rival formal permitting in Peru.

Security presents another challenge, with Zijin Mining losing control of 60% of its Buriticá gold mine tunnels to illegal miners backed by the Gulf Clan. Above-ground risk is not driving miners out of Latin America, but rather making them more selective about where and when they commit capital as governments worldwide compete for mineral supply chains.