FOR centuries Latin American mining has captivated international investors. Tales of Birú, a magical gold-laden land that we now know as Peru, were enough to convince Spanish conquistador Francisco Pizarro to lead a risky expedition against the Incas.
In the short-term the mission was an outstanding success with Pizarro ransoming captured Inca emperor Atahualpa for 13,000 pounds (lbs) of gold and twice as much silver.
In today’s prices that is almost $3billion worth of gold though the silver comes to a paltry £6million.
In the following years waves of fresh investors scoured the region looking for similar pots of gold but often with less success.
The mythical El Dorado, for example, first believed to be a king, then a kingdom, finally turned out to be a waste of time and money for the British, Spanish and German investors that backed expeditions to find it.
After Latin American countries gained independence, roughly 200 years ago, international mining investors had to change their approach. But the lure of Latin America’s mining sector remains just as strong.
It has the planet’s largest reserves of copper, lithium and silver with plenty of gold to boot. While modest local demand – it has less than 10% of both world population and GDP – makes it a natural exporter.
The region’s metal wealth is nothing new – just ask Pizarro – but what has changed are the conditions above ground.
Latin America has emerged as a mining-friendly jurisdiction with a wide range of international mining companies listed on Canadian, US, Australian and British stockmarkets.
The development of solid democracies across the region since the 1980s has allowed many Latin American countries to finally develop fair systems to manage international mining investment.
Of course, profiting from mined metals is a risky business – Pizarro ended up being hacked to death, spending his final moments daubing himself with a cross in his own blood.
But from solid, London-listed majors producing a steady flow of earnings, to aspirational explorers looking for that next big find, Latin America has plenty to offer MoneyWeek readers.
