Fast Facts Latin America in focus

Transcription

1 Fast Facts Latin America in focus Part of the Metal Bulletin 2016 Survival Kit series

2 02 Contents Metal Bulletin reports in-depth on the metals and mining industry around the world, from offices in London, New York, Singapore, Shanghai and Sao Paulo. The Fast Facts: Latin America series details the major features of some of the key countries of the region, looking at their economies, governments, growth rates, infrastructure and the mines and projects that major mining companies have there. Page 3 Page 6 Page 8 Page 10 Page 12 Page 14 Page 16 Page 19 Page 21 Brazil Colombia Chile Ecuador Peru Uruguay Argentina Bolivia Venezuela Copyright notice: Metal Bulletin. All rights reserved. No part of this publication (text,data or graphic) may be reproduced, stored in a data retrieval system, or transmitted, in any form whatsoever or by any means (electronic, mechanical, photocopying, recording or otherwise) without obtaining Metal Bulletin s prior written consent. Unauthorised and/or unlicensed copying of any part of this publication is in violation of copyright law. Violators may be subject to legal proceedings and liable for substantial monetary damages for each infringement as well as costs and legal fees. Brief extracts may be used for the purposes of publishing commentary or review only provided that the source is acknowledged.

3 03 FAST FACTS LATIN AMERICA: Brazil Some of the world s largest geological reserves are located in Brazil. The country s key metal interests include iron ore, bauxite, aluminium, gold, copper, manganese, nickel, zinc, and niobium. It is the largest country in South America, with its eastern border on the Atlantic Ocean. It neighbours all countries in the region except Chile and Ecuador. The country s mining royalty the Financial Compensation for the Exploration of Mineral Resources (CFEM) currently varies from 0.2% to 3%. But a new regulatory framework for Brazil's mining sector, proposed two years ago and still awaiting approval by the country s congress, would increase the royalty to between 0.5% and 4%. Brazil covers an area of 8.5 million sq km, housing an estimated population of million. Portuguese is the official language of Brazil. The country s main exports are iron ore, soybeans and crude oil. Aluminium still remains relevant among the country s export products, despite the decline in production in recent years. GDP growth forecast After a stagnant 2014, Brazil s economy is expected to enter into recession this year, while unemployment and inflation continue to rise at a strong pace. Brazil s GDP grew only 0.1% last year, to 5.5 trillion Reais ($1.7 trillion). This was the weakest result since the 2009 global economic crisis. The largest economy in Latin America is expected to shrink 1.5% in 2015, according to the International Monetary Fund (IMF), while economists polled in mid-august by the country s central bank estimated a retraction of 2%. This reflects mainly the low confidence levels of both businesses and consumers, which in turn has led to reduced investments and spending. Government measures such as fiscal consolidation have also hurt confidence in the short run, the IMF said. Brazil s unemployment rate rose to 8% in the second quarter of 2015, while the official inflation index (IPCA) reached the highest level in over a decade in the first half of the year. Inflation should reach 9.3% in 2015, more than double the official target rate. Amid the economic crisis and a corruption scandal at stateowned oil producer Petrobras, president Dilma Rousseff has seen her approval rates plummet. Re-elected last year for a second term, Rousseff has been facing growing pressure to step down. She has said several times she will not resign and that there is no basis for an impeachment, as opponents have suggested.

4 04 Natural resources/mines The country s mining and metals activity includes the following: Bauxite & alumina: Brazil has the world s third largest bauxite reserves, estimated at 2.6 billion tonnes, according to the US Geological Survey (USGS). In terms of production, the country ranks fourth in the world, having recorded an output of million tonnes in Brazil is also the third largest producer of alumina behind China and Australia, with 9.95 million tonnes produced in Mineração Rio do Norte (MRN) leads bauxite production in Brazil, having produced 17.3 million tonnes last year. The company commenced operations in the late 1970s in the Amazon area, in the northern state of Pará. Brazilian mining major Vale owns 40% of MRN, but this could change in the medium term, as the company has signalled that it could sell its stake in the bauxite producer as it divests from non-core assets. Alcoa, BHP Billiton, Rio Tinto, CBA and Norsk Hydro also own stakes at MRN. Norsk Hydro produced 9.48 million tonnes of bauxite at its Paragominas facility in 2014, as well as 5.97 million tonnes of alumina at the Alunorte refinery, which is part of the industrial centre of Barcarena. Both are located in the state of Pará. Alcoa s main bauxite operation is Juruti, which is also located in Pará. The company produces alumina in Maranhão state at the São Luís consortium, in which BHP Billiton and Rio Tinto Alcan also have stakes. Votorantim Metais CBA produces bauxite in the states of Minas Gerais and Goiás, while its alumina production takes place in São Paulo. The country produced 962,000 tonnes of primary aluminium in Production has fallen further this year, and following the recent curtailment from Alcoa, now only Albras and Votorantim Metais CBA produce aluminium in Brazil. Owned by Norsk Hydro and a Japanese consortium, Albras aluminium output totalled 441,000 tonnes last year. CBA s primary metal production totalled 318,500 tonnes in Copper: Brazil produced a total of 265,900 tonnes of copper concentrates in 2013, according to the latest figures from the country s copper association, ABCobre. Vale is Brazil s leading producer of copper, operating the Sossego and Salobo mines in Pará. In 2014, the company produced a total of 208,000 tonnes of the red metal. Yamana Gold s Mineração Maracá produced 51,483 tonnes of copper concentrate last year from its Chapada open pit gold-copper mine in Goiás. Mineração Caraíba is Brazil s only electrolytic copper producer, situated in Bahia. In terms of refined copper output, Brazil produced 261,000 tonnes of the product in 2013, according to ABCobre. Paranapanema is the main refined copper producer in Brazil. Manganese: Brazil has about 10% of the world s manganese reserves. Pará, Minas Gerais and Mato Grosso do Sul are the key producing states. In 2014, the country s output totalled 2.5 million tonnes of manganese, according to the National Department of Mineral Production (DNPM). Vale is the largest player in the country, having produced 2.35 million tonnes of manganese ore last year. Aluminium: Brazil has fallen to ninth position among the global aluminium producers, as the country has been affected by a series of curtailments since 2009.

5 05 Transport infrastructure Railways: 28,538 km Highways: 1.58 million km, 212,798 km of which is paved. Sea ports and harbours: Brazil has 35 public sea ports, the largest being Santos, Itaguaí, Paranaguá, Rio Grande and Itaqui. Airports: 4,093, 698 with paved runways. Rating S&P: BBB-, just downgraded outlook to negative. Fitch: BBB, stable. Moody s: Baa3, stable. Electricity and power infrastructure Brazil s total installed capacity for electricity generation reached 137,394MW in June 2015, according to the country s energy and mines ministry. Politics Form of government: Federal Republic. President Dilma Rousseff has been in office since Sources: Brazil s Mines and Energy Ministry (MME), Brazil s Development, Industry and Foreign Trade Ministry (MDIC), Brazilian Institute of Geography and Statistics (IBGE), National Department of Mineral Production (DNPM), International Monetary Fund (IMF), US Geological Survey (USGS), Brazil s aluminium association (ABAL), US Central Intelligence Agency (CIA), The Organisation for Economic Cooperation and Development (OECD) Danielle Assalve danielle.assalve@metalbulletin.com Twitter: dassalve_mb Location: São Paulo This article was first published in August 24, 2015 Severe droughts in the country in the past two years have had a direct impact on the availability and price of energy, as the country relies heavily on hydroelectricity. Hydro potential accounted for 65.7% of the country s total capacity, followed by thermal (29.8%), wind (4.5%) and solar generation (0.01%). This scenario has had a considerable impact on electrointensive industries in Brazil, including aluminium and ferro-alloys producers. Belo Monte, in the northern state of Pará, is the country s largest hydroelectricity project. When complete, it will have an installed capacity of 11,200MW, positioning the facility as the third largest power plant in the country.

6 06 FAST FACTS LATIN AMERICA: Colombia Situated in the north of South America, Colombia neighbours Brazil, Ecuador, Panama, Peru and Venezuela. The country s key metal interests include nickel, copper and gold. Colombia has over 3,208km of coastline, including both the Caribbean Sea and the North Pacific Ocean. It covers an area of 1.14 million sq km, and has an estimated population of 46.7 million people. Spanish is the official language. GDP growth forecast Colombia s economy grew 4.6% in 2014, compared with an average of 1.3% for the Latin America and Caribbean region, according to figures from the International Monetary Fund (IMF). But the country has seen an economic slowdown in 2015, hit by factors such as lower manufacturing and mining output, and the drop in oil and coal prices. Oil is Colombia s key export sector. Despite recent declines in the price of oil, Colombia is expected to continue as one of the fastest growing economies in Latin America. The IMF estimates that the country will see its GDP increase by 3.4% in Estimates indicate that Colombia s inflation level should remain at around 3.6% in 2015, similar to last year s level. Unemployment levels have been falling in the country, reaching the lowest level in 15 years (8.2%) in June 2015, according to Colombia s National Administrative Department of Statistics (DANE). In 2014, the country reported an unemployment rate of 9.1%. Colombia s government remains in negotiations with the Revolutionary Armed Forces of Colombia (FARC), aiming to end the five-decade insurgency funded mostly by the illegal drug trade, which has claimed the lives of hundreds of thousands of Colombians. Colombia expects to reach peace with the FARC soon, president Juan Manuel Santos said in a recent interview. Natural resources/mines The country s mining and metals activity includes the following: Nickel: The Cerro Matoso mine, located in the Department of Cordoba, in northern Colombia, is the world's second largest ferro-nickel producer. In 2014, its output totalled 44,300 tonnes of ferro-nickel. BHP's demerged asset South 32 has a 99.4% ownership stake in Cerro Matoso. Copper: Atico's El Roble is the only copper mine in production in Colombia. It is situated in the Department of Choco, in the west of the country. In 2014, the high grade underground copper and gold mine reported an output of 19,417 tonnes of copper concentrates. El Roble underwent a production scale-up from late 2013, increasing the mine's nominal capacity to the current 650 tpd, from 400 tpd. Gold: Gold production in Colombia totalled 57,015kg in 2014, according to figures from the country's geological service (GSC). The two leading gold producers, Gran Colombia Gold and Mineros SA, accounted for about 10% of the country's total output, which remained strongly pulverised among several artisanal mining practices.

7 07 Transport infrastructure Railways: 874km Highways: 141,374km Sea ports and harbours: The largest seaports in the Caribbean Sea are Cartagena, Santa Marta and Turbo, while Buenaventura is the main port in the Pacific Ocean. Airports: 836; 121 with paved runways. Rating S&P: BBB, stable. Fitch: BBB, stable. Moody s: Baa2, stable. Electricity and power infrastructure About 70% of Colombia's capacity for electricity generation comes from hydro plants. Thermal power generation accounted for 29.6% of capacity in 2014, followed by smaller sources such as wind and biomass. Politics Form of government: Republic President Juan Manuel Santos has been in office since Sources: Colombia's Mines Ministry (MinMinas), Colombia's trade, industry and tourism ministry (MinComercio), Colombia's mining and energy planning unit (UPME), National Administrative Department of Statistics (DANE), ProColombia, International Monetary Fund (IMF), US Geological Survey (USGS), US Central Intelligence Agency (CIA), The Organisation for Economic Co-operation and Development (OECD) Danielle Assalve Twitter: dassalve_mb Location: São Paulo This article was first published in August 24, 2015 The country has a total installed capacity of 15,508MW, according to the latest report from the mining and energy planning unit (UPME). The Colombian electrical system has interconnections that allow for interchanges of electricity with Ecuador and Venezuela. Empresas Públicas de Medellín (EPM), owned by the Colombian city of Medellin, is the leading power generator in the country. The country has 110 power generation projects currently under development. When complete, these will add 4,974MW of capacity to the grid, according to ProColombia, the state agency responsible for attracting foreign investments to the country and promoting exports.

8 08 FAST FACTS LATIN AMERICA: Chile Chile, in southern South America, is the world s largest copper producer. Its mining interests also include iron ore, precious metals and molybdenum. Chile covers an area of 756,102 sq km area, stretched along a narrow strip of land locked in between the Pacific Ocean to the west and the Andes to the east. The country is also home to the Atacama Desert, one of the driest places on the Earth. Chile neighbours Argentina to the east, Bolivia and Peru to the north. Spanish is the country s official language, and Chile s population is estimated at 17.5 million. GDP growth forecast Heavily dependent on copper exports, Chile s economy grew by 1.9% year-on-year in 2014, the slowest pace of growth since the 2009 recession. The country s performance was affected mainly by lower investments in the mining sector and the slowdown of consumer demand. But Chile s economy is expected to pick-up again in The International Monetary Fund (IMF) forecasts a 2.7% growth for the country s gross domestic product (GDP) this year. Despite the headwinds from lower commodity prices and the consequent cuts to corporate investment, Chile should benefit from strong macroeconomic fundamentals, according to the IMF. The country s inflation rate stood at 3.6% in 2014, while the unemployment rate was 5%. But the IMF highlighted that uncertainties related to the global economic outlook and to reforms in Chile, such as the tax reform, have been clouding the horizon for the country. As for the mining sector, Chile currently has a specific tax that varies from 5% to 14% depending on the mining operational margin. The tax applies to companies selling more than 50,000 tpy of fine copper. Natural resources/mines The country s mining and metals activity includes the following: Copper: Chile is the largest copper producer in the world, but the country has seen its output hit by lower ore grades in recent years. In 2014, the country s mine production totalled 5.75 million tonnes of fine content, 0.5% lower than in the previous year. Chile is expected to produce 5.94 million tonnes of the red metal in 2015, according to the national copper commission, Cochilco. More than half of the country s copper production comes from the Antofagasta region, in northern Chile, with significant volumes also produced in regions such as Tarapacá, Coquimbo, Atacama and Valparaiso. State-owned Codelco, the country s largest producer, is carrying out a multi-billion dollar investment program in structural projects to revamp its aging mines. The company accounted for 32% of Chile s copper production last year. BHP Billiton s Escondida ranked second, accounting for nearly 20% of Chile s copper output in Molybdenum: Chile ranks third in the world for molybdenum production, behind China and the USA. The Latin American country produced 48,770 tonnes of molybdenum in concentrates in Codelco accounted for nearly 63% of this total, according to Cochilco. The remaining volumes were spread between Collahuasi, Los Pelambres, Anglo American Sur and Valle Central.

9 09 Precious metals: The country produced a total of 46,031 kg of fine gold last year, according to Cochilco. About 59% of the precious metal came from mines where gold was the primary commodity, while nearly 41% came from copper mines where gold was a by-product. Chile has the potential to increase its gold production over the next few years, with an investment portfolio estimated to be worth $17 billion, according to Cochilco. But increasingly stringent environmental requirements and pressure from local communities have been raising doubts about the execution of projects such as Barrick s Pascua Lama, located on the border of Chile and Argentina, which has been suspended since Chile s fine silver production totalled 1.57 million kg in 2014, of which more than 70% came from copper mining. Transport infrastructure Railways: 7,281km Highways: 77,764km, of which 18,119 km are paved. Sea ports and harbours: The country has a total of 57 ports, of which 25 are for public use, while 32 are privately-owned. Antofagasta, Mejillones and Coquimbo are among the key ports for mining exports. Airports: 481, of which 90 have paved runways. Rating S&P: AA-, stable. Fitch: A+, stable. Moody s: Aa3, stable. Electricity and power infrastructure Chile s energy is among the most expensive in the world, and is largely generated by fossil fuels. The installed capacity of the two main electricity systems in Chile SING (north region) and SIC (central region) totals 19,596MW. Of this total, thermal generation accounts for about 61%, followed by hydro (33%). The remaining capacity is divided between wind and sun generation. The SIC and SING electricity systems account for over 99% of Chile s total installed capacity. According to the country s energy ministry, there are a number of projects currently under construction that will expand the country s capacity by 3,862MW. Of this extra capacity, 42.7% will come from thermal power generation, while other projects include hydroelectric facilities and wind generation schemes. Chile relies heavily on energy imports, as the country does not have large fossil fuel reserves. According to the World Bank, Chile s net energy imports totalled 64% in In 2014, Chile s government unveiled an energy agenda to promote the use of renewable energy and to reduce electricity prices. In addition to challenges related to energy costs, miners in Chile s northern desert region are facing growing pressure related to the use of water for mining activities, which is becoming increasingly scarce. The use of desalinated seawater is expected to grow in Chile, but the costs involved could hurt the competitiveness of the industry. The country has also been tightening environmental regulations, with smelters required to lower emission levels by Politics Form of government: Republic. President Michelle Bachelet has been in office since Sources: Chile s mining ministry, Chile s energy ministry, Chile s national copper commission (Cochilco), Chile s national energy commission, Chile s Public Works ministry, Chile s central bank, World Bank, PricewaterhouseCoopers, International Energy Agency (IEA), International Monetary Fund (IMF), US Geological Survey (USGS), US Central Intelligence Agency (CIA), The Organisation for Economic Co-operation and Development (OECD) Danielle Assalve danielle.assalve@metalbulletin.com Location: São Paulo This article was first published in August 25, 2015

10 10 FAST FACTS LATIN AMERICA: Ecuador Ecuador is located in the northwest of South America, with its west coastline on the Pacific Ocean. The country contains significant copper and gold reserves and has been seeking to attract billions of dollars in foreign investments to develop strategic mining projects. It covers an area of 283,561 sq km and borders Colombia and Peru. The Galápagos Islands, in the Pacific Ocean, are also part of Ecuador. Spanish is the country s official language, but several indigenous languages are also spoken in Ecuador, mainly Quechua. Ecuador has an estimated population of 15.9 million. GDP growth forecast Ecuador s economic growth has slowed over the past few years, hit by the decline in crude oil prices. The country is the smallest member of the Organization of the Petroleum Exporting Countries (OPEC) and relies on the commodity for nearly half of its export revenues. Ecuador s gross domestic product (GDP) grew 3.8% yearon-year in 2014, according to the country s central bank. The country s GDP growth is expected to slow further in 2015, to a rate of 1.9%, according to estimates from the International Monetary Fund (IMF). Ecuador s 12-month inflation came to 4.2% in 2014, while the unemployment rate stood at 5% last year. With its revenues hit by falling oil prices, Ecuador s government has been looking to attract foreign investment to industry projects. In the mining sector, it expects to receive about $8 billion between now and 2025, to develop five strategic copper and gold projects. A mining ministry was formed in February 2015, which has since been working to reposition Ecuador as a mining-friendly country, by softening rules governing mining concessions. One example is the possibility of firming 30-year investment contracts with the promise of tax stability. In 2008, the country suspended all mining operations while it worked on a new mining law to end abuses in the system. Since then, mining projects have been scarce. Natural resources/mines The country s mining and metals activity includes the following: Copper: The copper-gold-silver Mirador project, run by Chinese-owned company EcuaCorriente, is the only large scale mining project currently under development in Ecuador. Mirador is in the economic assessment stage; the construction of the mine will require investments of $1.6 billion from 2015 to The exploitation stage is expected to begin during the second half of 2018, according to estimates from the government. Another key project in the country is the Panantza-San Carlos copper-molybdenum project, run by Explorcobres, which will involve investments of $1.3 billion. Gold: Three key projects in Ecuador are destined for gold and silver mining. These are Lundin Gold s Fruta del Norte; INV Metals Loma Larga, and Junefield Resources s Río Blanco.

11 11 Transport infrastructure Railways: 965km Highways: 43,670km Sea ports and harbours: Ecuador s major ports are Guayaquil, Esmeraldas, Manta and Puerto Bolivar. Airports: 432, of which 104 have paved runways. Rating S&P: B+, stable. Fitch: B, stable. Moody s: B3, stable. Electricity and power infrastructure Over the past few years, Ecuador has been seeking to change its energy matrix to a more environmentallyfriendly model. Politics Form of government: Representative Democratic Republic. President Rafael Correa Delgado has been in office since Sources: Ecuador s Central Bank, Ecuador s Electricity and Renewable Energy Ministry, Ecuador s Mining Ministry, International Monetary Fund (IMF), US Geological Survey (USGS), US Central Intelligence Agency (CIA), The Organisation for Economic Co-operation and Development (OECD) Danielle Assalve danielle.assalve@metalbulletin.com Twitter: dassalve_mb Location: São Paulo This article was first published in August 25, 2015 It intends to reduce the share of thermal generation by investing more than $6 billion in 11 hydroelectric projects. In 2011, the country s installed capacity totalled 5,336 million kilowatts, with fossil fuels accounting for 56% of the total. Hydroelectric plants accounted for 42% of the total capacity, while other renewable sources totalled 1.9%.

12 12 FAST FACTS LATIN AMERICA: Peru Peru is a country in western South America. Its key mining interests include copper, silver, gold, lead and zinc. It shares a border with Ecuador, Colombia, Brazil, Bolivia and Chile. The Pacific Ocean lies to its west, and the country has 2,414km of coastline. An estimated 30.4 million people live in Peru s 1.29 million sq km area. Peru has three official languages Spanish, Quechua and Aymara in addition to several other native languages. GDP growth forecast The country s economy expanded 2.4% in 2014, the slowest pace in five years and well below the 6% average growth rate seen in the past decade. This is in part a consequence of the weaker performance of the Peruvian mining sector, which has been hit by a significant drop in commodity prices. Copper and gold are the main mined products exported by Peru. The country s economy is expected to regain momentum in 2015, according to the International Monetary Fund (IMF), which forecasts a GDP growth of 3.8% for this year. This growth recovery is contingent on production at new mines approaching capacity and priority infrastructure projects unfolding according to plan, the IMF said. Despite that, the end of the commodity boom makes it necessary for Peru to deepen structural reforms so as to sustain potential growth and advance in social inclusion, the IMF added. The unemployment rate in Peru hovered around 6% in 2014, while 12-month CPI inflation was at 3.2% at the end of last year. Peru s mining sector received $5.6 billion in foreign direct investments in 2014, about 24% of the country s total investments. Early in 2015, the government issued a new decree updating its mining law to simplify the licensing process and stimulate investment. Natural resources/mines The country s mining and metals activity includes the following: Copper: Peru is the third largest copper producer in the world, behind Chile and China. The country produced 1.38 million tonnes of copper in 2014, almost stable from a year earlier. The Ancash region accounted for almost 30% of the volumes produced in Peru last year, followed by Arequipa (19%). Antamina, owned by BHP Billiton (33.75%), Glencore (33.75%), Teck (22.5%) and Mitsubishi Corp (10%), is the main copper producer in the country. Despite having increased the volumes of ore processed, the company has seen its copper output drop, mainly due to lower ore grades and occasional union actions. Grupo Mexico s Southern Peru Copper Corp is the country s second largest copper producer. It is currently working on the expansion of its Toquepala mine, while its Tía Maria project has been paused since May due to intense opposition from local communities in the Arequipa region. Once complete, Toquepala is expected to increase Southern Peru s annual production capacity by 100,000 tonnes of refined copper, while Tía Maria will increase copper cathode capacity by 120,000 tpy. Other relevant copper producers in Peru are Cerro Verde, Antapaccay, Chinalco Peru and El Brocal.

13 13 Zinc: Peru ranks third in global zinc production, with an output of 1.3 million fine tonnes in Antamina, the country s leading producer, saw its volumes fall 15.8% last year to 265,824 tonnes, affected by lower ore grades in the exploited areas and labour issues. Votorantim s Milpo, the second largest producer in Peru, reported an increase of 1.7% year-on-year to 228,860 tonnes, according to the country s mining ministry. Lead: Peru s lead output totalled 278,487 tonnes in 2014, and the country ranks as the world s fourth largest producer. In 2014, Milpo became the country s leading producer, accounting for 11% of Peru s lead output. The company is working to integrate its polymetallic operations at El Porvenir and Atacocha mines, creating the Complejo Minero de Pasco, which should yield results between 2015 and 2016, according to Peru s mining ministry. Precious metals: Peru s fine gold production totalled 4.5 million ounces in 2014, down 10.4% on an annual basis. Yanacocha is the leading gold producer in Peru, accounting for 21.6% of the total, followed by Barrick Misquichilca (13.3%). Nearly 90% of gold mining in Peru is carried out by large or mid-sized mining companies. The country s silver output grew 2.7% year-on-year in 2014, to 121 million fine ounces, according to figures from Peru s mining ministry. This places Peru as the world s third largest silver producer, behind Mexico and China. Cia de Minas Buenaventura and Antamina are the leading silver producers in the country. Transport infrastructure Railways: 1,854km Highways: 140,672km, of which 18,699km are paved. Sea ports and harbours: Among the major seaports are Callao, Chimbote, Matarani and Paita. Airports: 191, of which 59 have paved runways. Rating S&P: BBB+, stable. Fitch: BBB+, stable. Moody s: A3, stable. Electricity and power infrastructure Peru s installed electricity generation capacity has grown over the past ten years at an average rate of 6.5% per year, according to the country s energy and mining ministry (MEM). The country had 11,284MW of installed capacity in 2014, of which 66% was provided by thermal generation, followed by hydroelectric plants (32%). The remaining 2% is generated by solar and wind plants, MEM said. Private investments planned for the Peruvian electricity sector during are estimated to be worth $4.6 billion, according to the country s central bank. Politics Form of government: Constitutional Republic. President Ollanta Humala has been in office since Sources: Peru s energy and mining ministry (MEM), Peru s national statistics institute (Inei), Peru s central bank, International Monetary Fund (IMF), US Geological Survey (USGS), US Central Intelligence Agency (CIA), The Organisation for Economic Co-operation and Development (OECD), Metal Bulletin s Company Database Danielle Assalve danielle.assalve@metalbulletin.com Twitter: dassalve_mb Location: São Paulo This article was first published in August 26, 2015

14 14 FAST FACTS LATIN AMERICA: Uruguay Uruguay is situated in southern South America, locked between Argentina and Brazil, and borders the Atlantic Ocean. The country s mining interests include aluminium and gold. One of the smallest countries in the region, Uruguay has an area of 176,215 sq km. Almost 90% of its area is agricultural land, most of which is permanent pasture. While there has been some increased interest in the country s mining potential, the activity is still incipient in Uruguay, mainly focused in gold and iron ore sectors. Spanish is the official language of the Uruguay, which has an estimated population of 3.34 million. GDP growth forecast Uruguay s economy expanded 3.5% in 2014, according to the country s central bank. This represents a slowdown from the previous year, when its economy grew 5.1%. The mining sector accounts for less than 1% of the country s GDP. Inflation was at 8.26% at the end of 2014, while the unemployment rate reached 6.6%. According to the International Monetary Fund (IMF), the gradual deceleration of the Uruguayan economy has largely resulted from moderation in domestic demand growth and a less favourable external environment. Economic activity is projected to decelerate further but remain solid, the IMF said. The country s economy is expected to grow 2.8% in Despite the slowdown, Uruguay s economy has been consistently growing over the past decade, and the expansion has led to a significant reduction in poverty, according to data from the World Bank. The country seeks to encourage foreign investments by means of a law granting foreign investments the same treatment as national ones, posing no restrictions to capital repatriation or the transfer of benefits, dividends and interests. Last year, Uruguay received $2.76 billion in foreign direct investments. Natural resources/mines The country s mining and metals activity includes the following: Gold: Canada s Orosur Mining operates the San Gregorio mine, the only producing gold mine in Uruguay, according to a statement on the company s website. The mine is located in the department of Rivera, 450km north of the capital Montevideo and 70km from the Brazilian border. San Gregorio historically operated through a series of open pits. In 2011, the first underground gold mine in Uruguay was commissioned, now operating as the Arenal Deeps mine. In the 2015 fiscal year (ending May 31), Orosur gold s output totalled 53,485 ounces. Aluminium: Aluminios del Uruguay, founded in 1957, has an installed production capacity of over 5,000 tonnes of aluminium profiles and foil. More than half of its production is exported to the Mercosur trade block, the company said on its website.

15 15 Transport infrastructure Railways: 1,641km Highways: 77,732km, of which 7,743km is paved. Sea ports and harbours: Montevideo is the major port. Airports: 133, of which 11 have paved runways. Rating S&P: BBB, stable. Fitch: BBB-, stable. Moody s: Baa2, stable. Electricity and power infrastructure Uruguay s electricity sector is largely reliant on hydropower and thermal power plants. The country has been increasing its installed generating capacity in recent years, having reached 3,719MW in 2014, according to preliminary figures from MIEM. Politics Form of government: Constitutional Republic. President Tabare Vazquez has been in office since Sources: Uruguay s Industry, Energy and Mining Ministry (MIEM), National Institute of Statistics (INE), International Monetary Fund (IMF), Economic Commission for Latin American and the Caribbean (ECLAC), US Geological Survey (USGS), US Central Intelligence Agency (CIA), The Organisation for Economic Co-operation and Development (OECD), Metal Bulletin s Company Database, company websites. Danielle Assalve danielle.assalve@metalbulletin.com Twitter: dassalve_mb Location: São Paulo This article was first published in August 26, 2015 In 2014, about 46% of electricity generation came from thermal power plants, while 41% originated from hydroelectric plants. The remaining capacity was generated from other renewable sources.

16 16 FAST FACTS LATIN AMERICA: Argentina Located in southern South America, Argentina s key metal interests include aluminium, copper, gold, silver, zinc and iron ore. It borders Chile and the Andes to the west, and the Atlantic Ocean to the east. The country also shares a border with Bolivia, Paraguay, Brazil and Uruguay. Argentina is the second largest nation in the region, covering 2.78 million sq km. It houses an estimated population of 43.4 million people. Argentina continues to dispute sovereignty over the UKadministered Falkland Islands - Islas Malvinas. GDP growth forecast Argentina s economy is expected to face contraction in 2015, having slowed down to a growth rate of 0.5% last year. According to the International Monetary Fund (IMF), output in the country is projected to decline 0.3% this year. Factors such as unstable currencies, low commodity prices and a recession in Brazil, the country s top trading partner, are among the headwinds faced by Argentina. Significant macroeconomic imbalances, a weak investment environment and interventionist policies that include currency and trade controls have also hit Argentina s economic activity. The country has one of the highest inflation rates in the world. Official figures, which many in the country suspect are manipulated, showed that consumer prices in Argentina reached 24% in 2014, while private estimates pointed to an inflation rate of nearly 40% last year. The unemployment rate reached over 7% of the economically active population in The country is set to elect a new president in October 2015, as Cristina Fernandez constitutionally cannot run for a third consecutive term. Daniel Scioli (Fernandez s chosen successor), Mauricio Macri and Sergio Massa are the leading candidates running for office. According to the IMF, despite the country s significant imbalances, financial investor sentiment towards Argentina seems to be recovering some ground. Investors relative optimism appears linked to Argentina s moderate external indebtedness along with an expectation that some of the most disruptive economic policies might be relaxed following elections in October, the IMF said. Natural resources/mines The country s mining and metals activity includes the following: Aluminium: Aluar is the only primary aluminium producer in Argentina, located in the Puerto Madryn area. The Argentinian government has a 9% share in the company. In 2014, the country produced a total of 441,893 tonnes of the primary metal, according to the Argentinian Chamber of Aluminium Industry and Related Metals (Caiama). Nearly half of the volume was exported in 2014, compared to 60% in the previous year, the figures showed. Factors such as Brazil s economic slowdown and the decline in aluminium prices have been hitting the Argentinian industry. Aluar also faces issues related to the gas supply to its Puerto Madryn plant.

17 17 Earlier this year it announced an agreement to receive supply from Pan American Energy until January 2017, under special conditions. A controversy involving a supply contract between both companies remains, which is currently being addressed under an arbitration process. Copper: Minera Alumbrera, in the province of Catamarca, produced 102,600 tonnes of copper concentrates in 2014, down 6% from a year earlier. The mine is operated by Glencore, which holds a 50% interest. The remaining share is divided between Canadabased Goldcorp (37.5%) and Yamana Gold (12.5%). The Switzerland-based miner has been considering investing about $3 billion in the El Pachon coppermolybdenum project in the province of San Juan, which could commence production in According to Glencore, El Pachon has an initial production potential of 400,000 tpy of fine copper in concentrates. Zinc: Argentina s zinc mine output totalled 47,700 tonnes in 2013, according to the latest US Geological Survey Minerals report. Canada-based Silver Standard Resources owns the Pirquitas mine in the province of Jujuy, northern Argentina. It ships silver and zinc concentrates produced from the plant to third party smelters, the company said on its website. Glencore s AR ZINC has installed capacity of 42,000 tpy of zinc ingots, according to the information available on the company s website. It also owns Minera Aguilar, with a mine located to the northwest of the province of Jujuy. Precious metals: The country s mines produced a total of 50,650 kg of gold content and 843,600 kg of silver content in 2013, according to data from the US Geological Survey. Among the key mines in the country are AngloGold Ashanti s Cerro Vanguardia and Barrick s Veladero. Transport infrastructure Railways: 36,917km Highways: 231,374km, of which 69,412km is paved. Sea ports and harbours: Argentina has 43 ports, seven of which are sea ports. Buenos Aires is the country s main port, followed by others including La Plata, Bahia Blanca and Puerto Madryn. Airports: 1,138, of which 161 have paved runways. Rating S&P: Selective Default, negative. Fitch: RD, negative. Moody s: Caa1, negative. Argentina has a history of non-payments of foreign debt obligations, and the country most recently defaulted in Electricity and power infrastructure Argentina s installed electricity generation capacity stood at 31,076MW in 2014, according to the country s electricity market administration company, Cammesa. Of this total, 60% came from thermal power plants, while hydroelectric plants accounted for 36% of the installed capacity. The remaining capacity was generated from nuclear, wind and solar power. The country s installed capacity should grow by 2,600MW in the short term, as projects such as Vuelta de Obligado and the new nuclear plant Atucha II come online, Cammesa said.

18 18 Politics Form of government: Republic. President Cristina Fernandez has been in office since Sources: National Institute of Statistics and Census of Argentina (Indec), Ministry of Foreign Affairs and Worship, Argentina s Mining Secretary, Argentina s Central Bank, Argentina s electricity market administration company (Cammesa), International Monetary Fund (IMF), Economic Commission for Latin American and the Caribbean (ECLAC), US Geological Survey (USGS), US Central Intelligence Agency (CIA), US Energy Information Administration (EIA), The Organisation for Economic Co-operation and Development (OECD), Metal Bulletin s Company Database, company websites Danielle Assalve danielle.assalve@metalbulletin.com Twitter: dassalve_mb Location: São Paulo This article was first published in August 27, 2015

19 19 FAST FACTS LATIN AMERICA: Bolivia Bolivia is a landlocked country in central South America, neighbouring Brazil, Paraguay, Argentina, Chile and Peru. Key metal interests include silver, zinc, lead and tin. The country s mining industry is divided into state-owned groups, including Comibol, private companies and small cooperatives. Bolivia occupies an area of 1.1 million sq km, and is home to an estimated population of 10.8 million. Spanish, Quechua, Aymara and Guarani are Bolivia s official languages. GDP growth forecast Bolivia s government has recently reduced its growth forecast for the country to 5% growth in 2015, compared with a previous estimate of 5.9%. This reflects the expected slowdown in the growth rate of private sector investments. According to Bolivia s finance ministry, private investment should grow by 13% in 2015, to $1.7 billion, compared with a 36% annual increase in In 2014, Bolivia s output grew 5.4%, the strongest growth rate in South America. The International Monetary Fund (IMF) has a more conservative estimate for the Andean nation s GDP in 2015 it expects the country s economy to grow 4.3%. Bolivia s economy, which is dependent on a large hydrocarbon sector, has benefitted from high commodity prices and increased natural gas exports in recent years. While the availability of fiscal reserves is expected to help smooth the downturn, several ongoing policy initiatives seem likely to accelerate the weakening of public balance sheets, the IMF added. The country has made advances in reducing poverty in recent years and increasing income per capita. Despite that, the number of citizens that emigrate from Bolivia to countries such as Argentina, Spain and Brazil remains higher than the number of those who return to the country. Bolivia s 12-month inflation rate stood at 5.2% in 2014, while the unemployment rate was 4% last year. The country recently approved a new mining code to attract more investment and promote the exploration of new deposits. Natural resources/mines The country s mining and metals activity includes the following: Silver: Bolivia s silver mine production totalled 1,300 tonnes in 2014, according to estimates from the US Geological Survey (USGS). Sumitomo s Minera San Cristobal open-pit mine produces silver, zinc and lead in Bolivia s southwestern region of Potosi. It is one of the largest mining facilities in Bolivia. As of 2012, its annual capacity was estimated at 525,000 kg of silver. Other silver producers in the country include Empresa Minera Manquiri and several small-scale operations and cooperatives. But the country is now adjusting to a scenario of much lower oil and gas prices, the IMF said.

20 20 Lead: Bolivia is estimated to have mined 75,000 tonnes of lead in 2014, according to the USGS. Major producers include Sumitomo s San Cristobal mine and state-owned enterprises. State miner Comibol is responsible for managing the country s interests in mining concessions, metals and industrial plants, by means of joint ventures and other agreements with private entities. It operates the Karachipampa (EMK) lead-silver metallurgical complex, which has an estimated capacity of 21,063 tpy of lead and 163 tpy of silver. Built in the 1980s, the complex has not yet reached commercial production due to a number of reasons including a lack of local concentrates and problems with its Kipset furnace. Transport infrastructure Politics Form of government: Republic/Social Unitarian State. President Evo Morales has been in office since Sources: National Statistics Institute (INE), Bolivia s Ministry of Economy and Public Finance, Bolivia s Electricity Authority, Bolivia s General Migration Direction (DGM), International Monetary Fund (IMF), Economic Commission for Latin American and the Caribbean (ECLAC), US Geological Survey (USGS), US Central Intelligence Agency (CIA), US Energy Information Administration (EIA), The Organisation for Economic Co-operation and Development (OECD), Metal Bulletin s Company Database, company websites Danielle Assalve danielle.assalve@metalbulletin.com Twitter: dassalve_mb Location: São Paulo This article was first published in August 27, 2015 Railways: 3,504km Highways: 80,488km, of which 11,993km is paved. Sea ports and harbours: The country has no seaports, but it has free port privileges in maritime ports in Argentina, Brazil, Chile, and Paraguay, according to the CIA World Factbook. Airports: 855, of which 21 have paved runways. Rating S&P: BB, stable. Fitch: BB, stable. Moody s: Ba3, stable. Electricity and power infrastructure Bolivia had an effective potential capacity of 1.96MW by the end of 2014, of which 75% originated from thermal plants. Hydroelectric power accounted for nearly 25% and the remaining capacity was generated by other renewable sources. The country privatised its electricity sector in the early 1990s, which now comprises the National Interconnected System (SIN) and an off-grid system. Empresa Electrica Guaracachi (EGSA) and Empresa Electrica Valle Hermoso (EVH) are two of the key electricity generators in Bolivia.

21 21 FAST FACTS LATIN AMERICA: Venezuela Venezuela is located in northern South America, sharing a border with Colombia, Brazil and Guyana. The country s key metal interests include aluminium and gold. It has the Caribbean Sea and the Atlantic Ocean to its north. Among the nation s main natural resources and metal interests are petroleum, bauxite, aluminium, gold and iron ore. An estimated 29.3 million people live in Venezuela s 912,050 sq km area. While Spanish is the official language, several indigenous dialects are also spoken across the country. GDP growth forecast Venezuela s recession is expected to worsen in 2015, as the country s existing economic problems have been aggravated by the sharp decline in oil prices. The nation is heavily reliant on exports of petroleum and petroleum products. For Venezuela s economy, the massive terms-of-trade shock suffered over the past few months has made an already difficult situation even worse, the International Monetary Fund (IMF) said in a recent report. The country s gross domestic product (GDP) contracted 4% last year and is expected to shrink by as much as 7% in 2015, the third-largest output contraction of any economy in the world, according to the IMF. Venezuela s inflation rate is estimated to be the highest in the world, at 95% in This scenario was caused by years of unsustainable macroeconomic expansion and heavy-handed microeconomic intervention, the IMF noted, adding that this led to acute scarcities and depressed private sector confidence in the nation. Adding to that, low oil prices have hit government revenues from the export of commodities, intensifying the shortage of foreign currency and adding enormous pressure to the country s complex currency exchange system. Signals of increased default risk have also led rating agencies to downgrade the country s ratings. Major policy changes are indispensable to arrest the economic crisis in Venezuela, the IMF added. A history of nationalisations in the country, combined with increased interventionism from the government in the economy and a restrictive legal framework are also affecting foreign direct investment into Venezuela, according to a report from the US Geological Survey (USGS). Venezuela s Constitution establishes that all mineral and hydrocarbon resources belong to the government, while the Ministry of Popular Power for Oil and Mining (MPPM) is responsible for all legal matters related to these activities. Natural resources/mines The country s mining and metals activity includes the following: Bauxite & aluminium: State-owned CVG runs eight companies that operate in this industry, including aluminium smelters CVG Venezolana de Aluminio C.A. (Venalum) and CVG Alumino del Caroni S.A. (Alcasa), and the bauxite and alumina producer CVG Bauxilum C.A. (Bauxilum). The country produced a total of 109,536 tonnes of primary aluminium in 2014, the lowest level in 30 years. Reasons for this drop in production include financial problems faced by local producers, a lack of adequate technology and labour issues, in addition to a challenging global scenario.

22 22 Despite this, the government expects the sector to recover in Venezuela has an installed capacity of 600,000 tpy of primary aluminium. The country produced a total of 2.2 million tonnes of bauxite in 2014, according to estimates from the USGS. Gold: Despite having the largest reserves in Latin America, Venezuela s gold production has been severely hit by a lack of investment, technology and labour issues. State-owned Compañía General de Minería de Venezuela (Minerven) reported an output of 867 kg of gold in 2014, down from 1,691 kg produced in the previous year, and well below the government target for the company. According to local media reports, informal (artisanal) miners produced about 10 tonnes of gold in 2014, most of which was smuggled across the border. Venezuela s gold industry was nationalised in 2011 under then President Hugo Chavez. Transport infrastructure Railways: 447km Highways: 96,189km Sea ports and harbours: Major ports include La Guaira, Maracaibo and Puerto Cabello. The country has been investing to increase the capacity of the National Electric System by means of repairing existing plants and installing generation plants in the centre and west of Venezuela, according to the ministry for electric energy (MPPEE). Politics Form of government: Federal Republic. President Nicolas Maduro has been in office since Sources: Ministry of the Popular Power to Industries (MPPI), Ministry of the Popular Power for Oil and Mining (MPETROMIN), Ministry of the Popular Power for Electric Energy (MPPEE), World Gold Council, El Mundo newspaper, International Monetary Fund (IMF), Economic Commission for Latin American and the Caribbean (ECLAC), US Geological Survey (USGS), US Central Intelligence Agency (CIA), US Energy Information Administration (EIA), The Organisation for Economic Co-operation and Development (OECD), Metal Bulletin s Company Database, company websites Danielle Assalve danielle.assalve@metalbulletin.com Twitter: dassalve_mb Location: São Paulo This article was first published in August 28, 2015 To view all of Metal Bulletin s Fast Facts Latin America briefings, click here. Airports: 444, of which 127 have paved runways. Rating S&P: CCC, stable. Fitch: CCC, stable. Moody s: Caa3, stable. Electricity and power infrastructure Venezuela had an estimated installed generating capacity of 27,496MW in 2012, 64.3% of which was produced by hydroelectric plants, with the remaining 35.7% from fossil fuels.