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a plague o both your houses

Rating LatAm for mining, country by country

So there we were, an e-mail pal and I shooting the breeze yesterday, when he asked me what kind of score out of ten I’d give this-or-that country down here for a combo of miner-friendliness, business-friendliness and importantly acceptance of foreign direct capital (FDI). After I replied he said “hey, that lil’ list would make a cool post, dude”, so here we are.

The countries are in alphabetical order and I’ve missed out most of the TPLACS*. The list is by no means definitive and just a personal take on things.

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Argentina: between 0 and 8, depending on the province. It’s a real mixed bag because regional governors have far more influence than the national gov’t. As a couple of examples , Mendoza scores a fat zero (note where XRC.v has a large play and why they never talk about local politics). On the plus side Jujuy would score a very solid eight….the kind of region that NGO treehuggers fear to tread. Rule one: never upset a miner in Jujuy by threatening to close his mine down….they got dynamite and pickaxe handles and stuff

Bolivia: 3, but was a 5 and will probably go back to 5 or so in the next year or so. The country is full of families that have mined the seams for generations. The main problem is that the backbone metal of zinc is low and putting people out of work. FDI is welcome, but not at any price. Playing good corporate citizen with your local village and your national government is part of the game.

Brazil: a 4 or 5 to get through the inital paperwork..once you’re up and running it’s a 7 or 8. It’s a bureaucratic and corruption nightmare to get a business going in Brazil, but once you have the paper ducks in line things get easier. In the case of mining local traditional local families do not mix well with the providers of FDI; (What passes for) the Brazilian upper class landed gentry has a superiority complex that makes Donald Trump look humble.

Chile: 10. In the words of Tina Turner, simply the best. Chileans look after their miners and welcome FDI with open arms, giving tax breaks and preferential treatment to foreign miners. Unusually for LatAm corruption is not a big problem (hey, after what I’ve seen coming out of Illinois today, the USA has a lot to learn too). It doesn’t have the best reputation for regional business for nothing.

Colombia: 6 or 7…surprisingly good these days. Regions such as Antioquia are actively promoting themselves to FDI nowadays, and there’s a quiet groundswell of junior exploration projects happening under the radar of the wider mining community. Again, regional issues are important, such as getting extorted or assassinated by far right or far left terrorists. I mean, a bullet in your head could ruin your weekend.

Ecuador: Right now it’s a poor 3, but once that mining law hits the books Studmuffinland will be a 5 or more. This is going to be great! Again micro-regional issues are important to take in account. There are plenty of pockets in Ecuador that are raring to get mining, and Zaruma is one of them. Buy DMM.to!

Guyana: 4. Corruption is high, action and forward movement is low. The country doesn’t have a big reputation as a welcome home for FDI (outside of the banks, anyway) and it shows.
There’s nothing really wrong here that a decent pathfinder project couldn’t improve.

Mexico: 9..almost as good as Chile…some regions have social issues but apart from that we’re in another low taxation and high mining acceptance country. Plenty of rocks to look at, too.

Paraguay: 4…nobody has a clue about mining. Not a clue. There are a couple of juniors pootling around the country and uncovering some friendly rocks, but it’s a real crapshoot how both local and national leaders will ever react to some guy saying “Look, we really want to invest $500m in your country and build a mine right here (points at map with finger).”

Peru: 7…not as good as people imagine. The bureaucracy is a pain. There are plenty of miner-friendly regions, but micro-regions can be anything from wall to wall mining communities that welcome FDI with open arms to extremely hostile locals that would burn your Jeep (with you inside) rather than see you dig a hole in the ground. Local knowledge is essential in LatAm, but Peru mining is an extra special case.

Uruguay: 5 ..ok i suppose for the little amount of mining that’s done there. It gets in the way of the cows and sheep, y’see.

Venezuela: Zero; give me a choice between two Christmas gifts; a mine in Venezuela with a $10m NAV or $10,000 in cash. I’d take the cash after about one nanosecond of careful consideration. You could even barter me down to $5,000 if you tried. The Venezuela of Hugo Chávez has plenty of positives, but its attitude to FDI isn’t one of them. Its attitude to miners is another. They know a lot about oil, but Miley Cyrus knows more about mining than MIBAM.

*tin pot lil american countries

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