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2022 ‘mining risk index’ takes aim at left-wing governments in Latin America

The Canadian mining sector keeps a close eye on political developments in the region

Canadian BusinessLatin America and the Caribbean

Pedro Castillo, the president of Peru, speaks during a rally in Lima. Photo from Shutterstock.

On July 7, 2022, Florida-based market research firm Americas Market Intelligence (AMI) released a report on “mining risk” in Latin America. The report identifies seven categories of risk to foreign investment in the countries of the region—political interference, economic pressure, community opposition, legal and regulatory instability, reputational risk, safety and security, and operational risk—and assigns each country a numerical value based on these risks. The higher the number, the more favourable the country is to foreign mining investment.

The report’s authors are John Price and Alejandro Álvarez. Price, a former employee of Kroll Inc., launched AMI in 2011. He has given lectures about Latin American politics at universities in Canada, the US, Mexico, and more. Álvarez also worked for Kroll, managing their regional offices in Bogotá and Miami, before joining AMI. Their full report is available to read upon request at the firm’s website.

According to its methodology, Gabriel Boric’s Chile is the Latin American country that is most open to foreign mining investment, with a score of 68 out of 70. But while lauding the investment climate in Chile, the authors also evince trepidation about Boric’s left-of-centre political inclinations. In fact, the section on Chile celebrates the fascist military dictatorship of Augusto Pinochet, quoting an unidentified political scientist who says that “many Chileans still fondly remember the days of Pinochet,” and that “political overreach” by the Boric government “could take Chile on the path to political radicalism.” The report also notes that the mining-friendly Pinochet-era constitution, the basis of “the world’s most neo-liberal democratic economic mode,” is in the process of being rewritten following public support for its elimination, and that this could create a “potentially disruptive new constitution in 2022.”

“Will the re-written constitution and/or new mining policies from the Boric administration get approved?” the report asks. If so, Canadian Mining Journal contributor Cecilia Jamasmie notes, it could “bring a full ban to mining in glaciers, many of which are adjacent to lithium deposits,” and “may also include mandatory community prior consent on new concessions near indigenous land claims and the end to ownership of water within concession boundaries.” The AMI report also explains that the Chilean senate has approved a proposed tax bill relating to copper and lithium mining, but that “the mining industry will continue to lobby for restraint in any attempts to raise tax levels.”

Despite these risks, the authors note that the Boric government is quite moderate economically, and that “businesses will still thrive in Chile—but they will have to adapt.”

According to the report, the second most investment-friendly country in the region is Peru. The authors state that Peru has historically been one of the most promising sites of international mining investment in Latin America, but that “with such wealth creation has come jealousy, rivalry, and political opportunism,” including local community opposition engineered in collaboration with unidentified “organized crime syndicates.” These are the factors, the report claims, that led to the election of Pedro Castillo of the “far-left” Peru Libre party.

After taking office, Castillo backtracked on many of the progressive positions he adopted during his campaign, a move which resulted in an almost total collapse of public support for his administration (one poll indicates an approval rating of only nine percent). AMI itself admits that it was Castillo’s abandonment of previous “anti-mining” positions that contributed to his loss of public backing, as many Peruvians felt that he spurned support for local community development in favour of catering to transnational capital.

The report places the centre-left administration of Argentina in third place, explaining that the main risks to investment in the country come from the fact that “after negotiating with the IMF, the [Alberto] Fernández administration is on the lookout for new tax revenue.” However, the authors approvingly note that most mining regulations are “thankfully” governed by the provinces, which are generally more open to industry concessions.

AMI’s position on several other Latin American countries is predictably anti-left. In the case of Brazil, the fourth-place country, the authors write that “some of the Bolsonaro administration’s greatest controversies have centred on his relaxing of mining restrictions,” before noting that Bolsonaro’s “pro-mining decrees” may face unwanted scrutiny under a Lula da Silva administration. Panama, meanwhile, is in fifth place, with the primary risk being President Laurentino Cortizo’s promise to create a new mining code to replace the current one, which was written in 1963.

Regarding Mexico, the sixth-place country, the authors write that President Andrés Manuel López Obrador has “disrupted [the] tradition” of broad political support for mining investment, mainly with his recent decision to nationalize the country’s lithium, and that this could present a threat to future mining profits.

The report takes aim at left-wing movements in Ecuador, which the authors claim oppose conservative president Guillermo Lasso “out of spite.” They also express concern about Honduran president Xiomara Castro’s possible annulment of 282 mining concessions and note that the government’s proposal to raise taxes on the industry may end up “tarnishing the national brand of Honduras.” Meanwhile in Bolivia, the AMI’s second riskiest country, Price and Álvarez haughtily bemoan the “purported hoarding of mining revenues by the national government in La Paz (a longstanding tradition).”

Unsurprisingly, the riskiest country in the authors’ view is Venezuela. “Investors must carefully screen the ultimate beneficiaries of their businesses,” they write, because “almost all Venezuelan businesses involving foreign investors are structured as joint ventures with the government.”

Following the release of the report, its findings were quickly republished by the Canadian Mining Journal and Northern Miner for the purpose of advising Canada-based mining companies on the present investment outlook in an increasingly left-oriented Latin America. The Canadian Mining Journal was established in 1882 for the purpose of “sharing information to advance the [mining] industry,” and along with Northern Miner, it is one of the preeminent pro-industry magazines in Canada. The fact that these magazines published the AMI’s report for their often industry-affiliated readers shows the careful eye that the Canadian mining sector keeps on political developments in Latin America.

It is not difficult to identify the reasons for the Canadian mining industry’s keen interest in Latin American politics, and their concerns for the apparent risks that accrue when left-wing administrations take power and attempt to steer their resource earnings toward internal development. As the Working Group on Mining and Human Rights in Latin America writes, “70 percent of mining activity in Latin America involves Canadian companies, a figure that demonstrates how much weight they have in the region.” Additionally, the Working Group found that the mining sector plays “a fundamental role” in the Canadian government’s decision to cooperate with certain foreign states over others. It is not difficult to see this reality when one compares Ottawa’s attitude toward socialist-oriented states in the region such as Bolivia or Venezuela, where the Trudeau government has supported two coups in the past three years, with hard-right governments like Colombia under Iván Duque and Bolsonaro’s Brazil, which almost never merit mention from the prime minister or his team.

Left-wing governments threaten to stifle the steady flow of profits to Canada that, in a socialist-oriented model, would remain within the countries of Latin America. AMI’s “mining risk index” thus offers a useful window into the operational thinking of the North American mining sector in Latin America. The fact that these long-running Canadian industry publications distributed the report for their readers shows that they share the author’s anti-left, pro-neoliberal outlook—one that influences how Ottawa engages with governments in the region.

Owen Schalk is a writer based in Winnipeg. He is primarily interested in applying theories of imperialism, neocolonialism, and underdevelopment to global capitalism and Canada’s role therein. Visit his website at


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