Global mining rankings: Where does LatAm stand?

Latin America remains a dominant force in global mining, leading the world in copper, silver and iron ore production.

The region is also a major player in zinc, lead and the emerging lithium industry, according to the US Geological Survey’s Mineral Commodity Summaries 2020 report.

But Latin America has work to do in terms of investment attractiveness.

Chile, Peru and Mexico all slipped in the rankings in the Fraser Institute’s Survey of Mining Companies 2019 report, with Argentine provinces and Central American countries among the least attractive jurisdictions globally.

INVESTMENT ATTRACTIVENESS

Just three of 23 Latin American jurisdictions feature in the top third of the global investment attractiveness rankings in the Fraser Institute survey.

Chile remains top regionally at 17^th out of 76, down from sixth of 83 jurisdictions in last year’s report.

Argentina’s San Juan province ranked 21^st – a huge improvement from 64^th – with Peru slipping 10 places to 24^th.

MID-TABLE

Argentina’s Salta province, Suriname, Mexico and Guyana ranked 36-39^th, followed – in Latin America – by Argentina’s Catamarca province (44).

Brazil rose 12 places to 46^th and Bolivia by 26 places to 48^th.

BOTTOM THIRD

Thirteen of the region’s 23 jurisdictions were in the bottom third of the table.

Argentina’s Chubut and La Rioja provinces, Guatemala and the Dominican Republic all came in the bottom five globally, with Venezuela – bottom of the pile last year – at number 70.

Argentine provinces Jujuy, Río Negro and Mendoza and Nicaragua were placed in the 60s, with Santa Cruz and Neuquén provinces, Colombia and Ecuador in the 50s.

PRODUCTION

Copper

Chile remains by far the world’s biggest copper producer – but its dominance waned in 2019.

Estimated output was 5.60Mt, down from 5.83Mt in 2018, but still over a quarter of global output of 20Mt last year, according to the US Geological Survey report.

Peru is the second biggest copper producer with 2019 output down 40,000t at 2.40Mt, with Mexico eighth at 770,000t (2018: 751,000t).

Chile also dominates copper reserves, at 200Mt, compared to a global total of 870Mt.

Peru and Australia’s reserves are estimated at 87Mt each, with Mexico fifth behind Russia at 53Mt.

Gold

Peru and Mexico remain top 10 gold producers, but both registered declines.

Peru tied for seventh place with Ghana at 130t (4.2Moz), down from 143t, with Mexico ninth at 110t (2018: 117t).

China cemented its position as top dog in the gold space, with output rising to 420t from 401t.

Brazil and Argentina ranked 13th and 14th, respectively, with output unchanged at 85t and 72t.

Australia, Russia and South Africa host the biggest gold reserves, with Brazil sixth at 2,400t and Peru seventh at 2,100t.

Argentina and Mexico ranked 11^th and 12^th, respectively, at 1,600t and 1,400t.

Silver

Mexico continues to lead the world in silver, with production rising to 6,300t last year from 6,120t, far ahead of second-placed Peru, which saw production slip to 3,800t from 4,160t.

Third-ranked China produced 3,600t, up 30t.

Chile came seventh at 1,300t followed by Bolivia and Argentina in joint eighth at 1,200t.

While a distant second in output, Peru boasts the biggest silver reserves, at 120,000t, far ahead of seventh-placed Mexico (37,000t).

Iron Ore

Brazil remains a heavyweight contender in iron ore, with usable ore output rising to 480Mt from 460Mt, and iron content up to 260Mt from 250Mt, second biggest globally after Australia (580Mt).

Vale – Brazil’s biggest iron ore miner – saw iron ore fines output slip 21% in 2019 to 302Mt as the company grappled with the aftermath of the Brumadinho dam collapse, which saw a string of operations suspended.

Brazil’s crude ore reserves are also second biggest after Australia at 29Bt, compared to a global total of 170Bt.

Lead

Lead output was stable in Peru and Mexico in 2019, with Bolivia seeing a drop.

Peru ranked third after China and Australia at 290,000t, with Mexico (240,000t) fifth. Eighth-placed Bolivia produced 100,000t.

Peru has the fourth biggest reserves at 6.3Mt behind Australia, China and Russia, with Mexico fifth at 5.6Mt.

Zinc

Peru is the second biggest zinc miner, with output of 1.40Mt (2018: 1.47Mt), behind China’s 4.3Mt.

Mexico ranked sixth behind Australia, India and the US at 690,000t (2018: 691,000t), followed by Bolivia at 460,000t, down from 480,000t.

Mexico came joint third with Russia for reserves at 22Mt, behind Australia and China, followed by Peru (19Mt).

Lithium

Australia was by far the biggest lithium producer in 2019 but Latin American countries are closing the gap.

Australia produced 42,000t of lithium last year, down from 58,800t, while second-placed Chile recorded a 1,000t rise to 18,000t.

Argentina was fourth (6,400t) after China (7,500t) and Brazil seventh at 300t.

Latin America’s importance in the lithium space is better reflected in reserves.

Chile hosts about half the global total at 8.6Mt, far more than Australia (2.8Mt), with Argentina third at 1.7Mt. Brazil is eighth at 95,000t.

Global resources – estimated at 80Mt – are dominated by Bolivia (21Mt), followed by Argentina (17Mt) and Chile (9Mt). Mexico ranked joint eighth with Canada at 1.7Mt.

ANALYSIS

Latin America’s mining report card could well read highly capable but must try harder.

On the positive side, the dominance of Chile, Mexico and Brazil in terms of production volumes in copper, silver and iron ore looks unassailable, with Peru a strong player across the precious and industrial metals.

But of these four major producers, all except Brazil saw investment attractiveness decline.

Political and regulatory uncertainty are among the factors weighing on miners in Chile, Peru and Mexico, while efforts by Brazilian President Jair Bolsonaro to ease red tape in the sector appear to be bearing fruit.

Addressing the declines will be a key priority for the Chilean and Peruvian governments, but less so for Mexico, with President Andrés López Obrador focusing on turning around debt-laden state oil company Pemex.

While the bulk of Latin American jurisdictions come in the bottom third for investment attractiveness globally, the region’s average ranking has improved marginally, to 52.1 of 76 jurisdictions from 57.8 of 83 last year.

But there is a long way to go to securing the region a leading position in attractiveness for mining investment.