mining operations

Hector Sosa Flores Explains the Difficulties Facing Mining Operations in Latin America

in Opinion

Mining remains a vital part of the South American economy. Chile is ranked first in the world for copper production, with Peru second. Peru also was the sixth ranking country when it came to gold production. South America is an attractive area for mining companies due to its rich natural resources and qualified workforce. However, there are some difficulties which are endemic to South American mining. Hector Sosa Flores, a mining entrepreneur, explores these difficulties and offers ways that companies can overcome these problems to create success for themselves.

Transportation

While South America is relatively close to the United States, it suffers from a lack of transportation infrastructure. Developing economies generally do not have the resources to devote to new road and rail projects. The rail was brought to South America in the nineteenth century, but it has not been updated much in the intervening years.

Terrain

South America is mountainous, and the natural environment which is blessed with metal and mineral abundance does not lend itself to the safe extraction of this wealth. It is difficult to extract these metals and to transport them to larger ports.

Crime

South America has been plagued with drug-related violence for the past several decades. Frequently, foreign nationals need to worry about the danger of kidnapping. Armed drug smugglers also occupy the same areas as mining camps.

Electrical and Water Supply

The rural communities where mining takes place do not have adequate power supplies. This means that miners need to bring expensive generators and burn large amounts of fossil fuel to power their equipment and infrastructure. Water supplies are also difficult to access in remote and mountainous areas. This means that methods of mining which use water to separate the soil from the ore are at a disadvantage.

Cultural Attitudes

South America is a remarkably diverse part of the world. The reputation of the mining as a business varies greatly from country to country. Some countries object to mining because it destroys the natural landscape. Others welcome miners as a valuable part of the local economy. The local attitudes also affect how many people from the community are willing to work in the mining industry, which can be dangerous.

Environmental Issues

Among mining companies, there is a growing sense of responsibility for the environment, but the industry as a whole can be damaging to the local landscape. Methods like strip mining give the industry an environmental black eye. It is necessary for mining companies to show that they are serious about preserving the environment.

Governmental Interference

In South America, governments may not always support mining as an industry. Public pressures have led local governments to close mines in several countries. This emboldens the protestors, who are in some cases funded by illegal mining operations and by crime syndicates. Communities are discouraged when they do not receive the royalties to which they are due. Governmental interference is a serious and growing problem when it comes to mining in South America.

Illegal Mining

In South America, there is an ongoing problem with illegal mining operations. These operations often fund organized crime, and they rob the local community of royalties. Illegal miners can also pose a physical danger to legal mining crews, and they may use force to discourage legal miners from moving into an area.

Possible Solutions

To combat some of these problems, it is necessary for mining companies to go into business with a complete picture of the local and governmental influences in the area they wish to mine. If they concentrate on working with the local residents and regulatory boards, they should be able to avoid some of these difficulties. Hector Sosa Flores encourages people who want to invest in South American mining operations to do their homework and pursue due diligence.

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