Seerist Mining Sector Report Exploring the Risk Landscape Across Latin America
CONFLICT OVERVIEW
Latin America has a well-established mining sector with critical mineral reserves that include lithium, copper, and cobalt. Mexico, Chile, and Peru, for example, collectively produce 40% of the world’s copper. Furthermore, the region’s mineral deposits are essential for clean energy technologies, attracting foreign investment and advancing the industry’s growth.
Events AI: Monitoring Regional Mining Developments
In Q1 2024, Events AI recorded more than 400 unrest, crime and conflict events related to mining across the Latam region.
Events AI provides automatic translation of local sources, making it easier to monitor regional developments.
Events AI Sentiment gauges the prevailing public attitude, whether positive, negative or neutral, towards a given topic across Seerist sources.
From February 2024, negative sentiment increased in relation to mining events across the Americas region, which is also reflected by spikes in anger over mining developments recorded by Emotions AI.
Tracking Verified Security Events in the Mining Sector
In Q1, Seerist verified events linked to the mining sector in the Americas concentrated in Latam, with unrest and crime events being the predominant incidents affecting mining in the region. Crime events in Mexico, Colombia, Brazil and Peru affected business personnel as well as mining sites. Additionally, anti-mining activists drove an increase in unrest in Ecuador, and labor unions conducted strikes and protests over mining policies, contracts, environmental impacts and working conditions in Panama, Peru and Bolivia.
Hover over white dots to view Verified Events.
In Focus: Panama
In Panama, thousands mobilized nationwide, beginning in October 2023, to protest against the approval of a new mining contract for the Cobre Panamá project – one of the largest copper mines in the world. This led to highway roadblocks and food shortages. The magnitude of civil unrest forced the government to backtrack on the contract, forcing the mine to suspend production. The Cobre Panamá case and the subsequent demonstrations also forced the Panamanian government to approve an indefinite mining moratorium, banning new concessions and the renewal of existing ones. The moratorium passed with ample support in the National Assembly legislature, making a repeal highly unlikely and banning mining in Panama indefinitely.
During the anti-mining protest movement in Panama, Seerist recorded more than 230 protests and our strategic partner, Control Risks, produced in-depth analytical updates as the situation unfolded.
Source: Control Risks
Americas Risk Ratings
Operational risk evaluates the influence of societal and structural factors either facilitating or impeding efficient business operations.
Regulatory risk evaluates the development, implementation, stability and enforcement of regulation that impacts the business environment.
Security risk evaluates threats to the financial, physical and human assets of a company, as well as the willingness and capability of public security forces to protect corporate assets and personnel.
Seerist Analyses Explore Mining-related Risks and Outlooks across Latam
Colombia
Gold-rich departments (such as Cauca and Chocó) that have mining, agriculture and logging potential and connect inland territories to the Pacific Ocean and Venezuela face historically high violence levels. They were already elevated – even extreme – in the past and remain considerably high: homicides (targeted and contract killings), forced disappearances, mass displacements, intimidation and mobility restrictions are frequent and significantly higher than in other departments. Illegal groups in these departments will likely continue exploiting President Gustavo Petro’s ambitious Total Peace strategy (his plan for achieving peace) to reinforce or expand their illicit activities in these zones.
Mexico
Shifting criminal dynamics in southern Chihuahua state will raise security risks for mining companies in the resource-rich region of the Sierra Tarahumara. However, the more notable threat for mining firms will be financially motivated crimes, such as blackmail or theft of material, as OCGs seek to bolster their resources to gain ground in this intensifying turf war.
Despite continuous co-operation between the state and federal administrations, political instability risks will increase this year in Sonora following the general election of 2 June. Industries in Sonora’s remote areas (like mining and oil and gas) face greater organised crime-related security risks, including incidental violence, financial blackmail and theft.
Brazil
Likely disputes within major organized criminal groups (OCGs) are likely to spark over coming months. Internal disputes resulted in score-settling and targeted killings over the past years. This dynamic is highly likely to result in disputes for routes used for narcotics and arms trafficking and territorial control for drug dealing in urban centres and illegal mining, logging and other activities in the Amazon, for instance. The rising violence will remain mostly limited to low-income areas or regions used for illicit activities and are unlikely to directly target businesses. However, personnel will be exposed to an increase in violent crime and incidental security threats stemming from sporadic shootouts or stray bullets from targeted killings.
Suriname
With drug trafficking concentrating on isolated and rural areas, businesses there – particularly mining and logging concessions – face increased security risks. With a substantial lack of state presence in the area, security risks in these areas will continue to increase in 2024.Businesses in the gold and timber sectors face higher risks of civil unrest and reputational damage due to rising community animosity and the lack of government control. Furthermore, scandals caused by police attacking protesters who block access to private premise will cause reputational risks for businesses in these sectors.
Chili
Indigenous communities will likely keep protesting against lithium-mining projects. As communities in northern Chile are seldom violent, companies will mostly face operational risks stemming from roadblocks. The announcement of new projects, the expansion of existing ones and any incident resulting in environmental damage will be the most common triggers of disruptive social activism.
Hover over green countries for analysis.
Source: Control Risks
Despite the opportunities for mining in the region, organized crime dynamics, as well as Environmental, Sustainability Governance (ESG) framework concerns, scrutiny by environmental activists, and social grievances will continue to disrupt mining activities. In Q4 2023 and Q1 2024, Seerist's verified events (VE) database shows that unrest in the form of protests by local community groups, as well as crime incidents perpetrated by organized criminal groups (OCGs), have mainly impacted mining operations in the region. For instance, in Panama, mining-related unrest increased from October to December 2023 as protests erupted nationwide in opposition to the approval of a new mining contract for the Cobre Panamá project. Meanwhile, in Ecuador unrest broke out in Palo Quemado (Cotopaxi) in March 2024 over a government environmental consultation for the implementation of a Canadian mining project in the area.
The sector is affected by rising insecurity, as illegal mining and protests held by mine workers and anti-mining communities have raised operational challenges. Furthermore, anti-mining movements continue to raise regulatory risks across the region, even when some local governments support mining projects. The mining sector faces a patchwork of differing regulations in the region, an increase in anti-mining sentiment and complex security challenges, which are likely to persist in 2024.
Source: Control Risks
Mexico
Shifting criminal dynamics in southern Chihuahua state will raise security risks for mining companies in the resource-rich region of the Sierra Tarahumara. However, the more notable threat for mining firms will be financially motivated crimes, such as blackmail or theft of material, as OCGs seek to bolster their resources to gain ground in this intensifying turf war.
Brazil
Likely disputes within major organized criminal groups (OCGs) are likely to spark over coming months. Internal disputes resulted in score-settling and targeted killings over the past years. This dynamic is highly likely to result in disputes for routes used for narcotics and arms trafficking and territorial control for drug dealing in urban centres and illegal mining, logging and other activities in the Amazon, for instance.
Suriname
With drug trafficking concentrating on isolated and rural areas, businesses there – particularly mining and logging concessions – face increased security risks. With a substantial lack of state presence in the area, security risks in these areas will continue to increase in 2024.Businesses in the gold and timber sectors face higher risks of civil unrest and reputational damage due to rising community animosity and the lack of government control.
Colombia
Gold-rich departments (such as Cauca and Chocó) that have mining, agriculture and logging potential and connect inland territories to the Pacific Ocean and Venezuela face historically high violence levels. They were already elevated – even extreme – in the past and remain considerably high: homicides (targeted and contract killings), forced disappearances, mass displacements, intimidation and mobility restrictions are frequent and significantly higher than in other departments.