IMS 2025 JV Video: Latin America is both risk frontier and growth engine, panel argues

Latin America: Risk Frontier & Growth Engine - Panel Discussion Summary

Key Concepts:

• Political Volatility in Latin America: The region presents both opportunities and risks due to fluctuating political landscapes.
• Shift Towards Center-Right Politics: A trend towards more economically-minded leaders is emerging in several countries, though unevenly.
• Importance of Local Community Engagement: Building strong relationships with local communities is crucial for successful mining operations.
• Sustainability vs. ESG: A distinction is made between ESG as a reporting framework and sustainability as a core economic principle focused on long-term viability.
• Formalization of Artisanal Mining: Addressing the growing issue of informal and illegal mining through formalization and supply chain solutions.
• Water Management: Critical importance of responsible water usage and discharge, including partnerships and innovative solutions.
• Positive Narrative & Industry Pride: The need to shift the public perception of mining and highlight its positive contributions.

1. Regional Political Landscape Overview

The panel began with a review of the political climate across key Latin American countries:

• Argentina: Under President Milei, the environment is currently business and mining-friendly, though the long-term impact of his administration remains to be seen. Previous administrations (Macri) showed initial promise but faced limitations within a four-year term.
• Mexico: President Sheinbaum, while from the same party as her predecessor (López Obrador), is perceived as more pragmatic. A shift towards a more constructive dialogue is occurring, but progress is slower than anticipated. The narrative surrounding mining remains largely negative.
• Bolivia: A significant change with the removal of the Socialist Party and the election of Rodrigo Paz, seen as a centrist, creating a more business-friendly environment.
• Chile: President Boric initially sparked concerns about nationalization, but his administration has become more moderate. Upcoming elections may shift the political landscape further to the right.
• Peru: Characterized by political instability and scandals under President Boluarte, but remains generally business-friendly. The bureaucracy managing mining operations provides a degree of continuity. Presidential elections in 2026 will be pivotal, with 46 candidates already declared.
• Colombia: A shift from a business-friendly environment under Uribe to a more socialist leaning approach under Petro.

A general consensus emerged that while individual country situations vary significantly, there's a broader trend towards a more centrist political approach across the region.

2. Trend Towards Economically-Minded Leaders

Mark Cudafani highlighted a broader convergence towards the center in Latin American politics. He emphasized that even with shifts to the left or right, a common ground is emerging. He stressed the importance of the mining industry proactively engaging in constructive dialogue and demonstrating its contribution to economic growth and poverty reduction.

3. The Importance of Local Community Engagement

Mark Cudafani underscored the critical role of local community relationships. He shared an example from KCG where aligning projects with the 26 priorities identified by the local community, rather than imposing solutions, was pivotal to success. He emphasized that understanding the interplay of local history, militarization, and the role of the church is essential. He noted that successful operations are often built on pre-existing relationships and local knowledge.

4. Sustainability vs. ESG – A Reframing of the Discussion

The panel engaged in a discussion about the terminology surrounding responsible mining practices. Mark Cudafani advocated for a shift away from the term "ESG" towards "sustainability," defining it as an economic concept focused on long-term performance and continuity. He argued that sustainability should be linked to economic returns, safety, environmental stewardship, and leadership development. Investors are increasingly focused on these core economic factors rather than simply checking boxes on an ESG checklist.

5. Addressing Artisanal and Informal Mining

Brent Burgers addressed the growing challenge of informal and illegal mining in countries like Peru. He outlined a strategy involving:

• Formalization: Supporting informal miners in forming cooperatives and achieving legal status.
• Supply Chain Solutions: Collaborating with organizations like the World Gold Council to establish a system where formalized miners can sell their gold to central banks, preventing it from re-entering the illicit market.
• Environmental and Labor Standards: Promoting improved environmental and labor practices within the formalized sector.

6. Water Management in Mining Operations

Water management was identified as a critical issue. Brent Burgers discussed Pan-American Silver’s approach, which includes:

• Reducing Water Intensity: Implementing measures to minimize water usage in operations.
• Water Recycling: Closing the loop on water usage through recycling and reuse.
• Responsible Discharge: Ensuring that discharged water meets or exceeds environmental standards.
• Community Partnerships: Collaborating with local communities on water monitoring and management.

7. Shifting the Narrative & Building Industry Pride

Sana Costa emphasized the need to counter the negative perception of mining in Latin America, rooted in a colonial history of resource extraction. She highlighted the importance of:

• Aligning with Government Priorities: Understanding and supporting the priorities of local, regional, and national governments.
• Positive Storytelling: Highlighting the positive impacts of mining on communities and economies.
• Learning from Canada: Drawing inspiration from Ontario’s success in fostering a positive image of the mining industry.
• Partnerships: Collaborating with trusted organizations to amplify positive messaging.

8. Pan-American Silver’s Legacy & Leadership

Brent Burgers attributed Pan-American Silver’s success to the legacy of Ross Beaty, emphasizing the importance of strong leadership, cultural values, and a commitment to responsible mining practices. He highlighted the company’s focus on reclamation and leaving a positive legacy in the communities where it operates.

Conclusion:

Latin America presents a complex landscape for mining companies, characterized by political volatility, social challenges, and environmental concerns. However, a trend towards more economically-minded leadership and a growing recognition of the industry’s potential contributions offer opportunities for growth. Success hinges on proactive engagement with local communities, a commitment to sustainability (defined as long-term economic viability), and a concerted effort to shift the narrative surrounding mining and build industry pride. The panel emphasized that a focus on economic returns, coupled with responsible environmental and social practices, is key to unlocking the region’s potential as a “risk frontier and growth engine.”