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Mining Latin America: Country by Country Update

As the coronavirus pandemic took effect in March and most Latin American countries imposed lockdown measures, their approaches to mining were very different. Chile, Ecuador and Colombia allowed mining to continue throughout the lockdowns, while Brazil and Argentina granted the sector essential status in March and April, respectively, following brief suspensions.

Recently though, mining companies in Latin America have started preparing to resume operations. This is particularly important in Peru and Mexico since both had wide spread suspensions. They are now set to be resume activities on a large-scale as governments try to reopen their economies. A number of smaller countries are also lifting restrictions on mining this month.

Here is a country by country review of the most important mining jurisdictions in Latin America: 

Chile:

Mining operations continued in Chile despite a 90-day state of catastrophe announced in March, which included powers to restrict movement and assure food supply and basic services. The industry was considered an essential service by the government although mining companies including state copper producer Codelco and Anglo American slowed operations and reduced their workforce to comply with the declaration.

To date, around 100 companies have extended shifts to 14 days, from the usual seven, to reduce exposure due to travel and prevent contagion within mining facilities. Authorities have also asked miners to cover shifts with local workers to avoid movement between regions. 

Mining Minister, Baldo Prokurica, was quoted last week  – “Mining companies are working with 30% less of their workforce but they are making big efforts to guarantee the operational continuity of facilities. Next week, we understand that COVID-19 infections will peak, so mining companies will review their restart decisions,” 

Prokurica said about 24,000 workers were demobilized due to suspension of works at Teck’s Quebrada Blanca phase 2, Antofagasta Minerals’ Los Pelambres expansion and Codelco’s Inca Pit and Andina initiatives.

With the pandemic still far from over in Chile, miners with operations in Chile are preparing to review options for a gradual return to full operations.  

Peru:

Peru was one of the first countries to impose a country-wide lock down. The decision was swift and the government listed mining as an a non-essential service. Shortly after, mining companies started announcing that they would be operating only with essential personnel during the lockdown.

Following a May 3 decree setting out guidelines to progressively resume economic activities in the country. For the mining sector, the reactivation plan will be in three stages: the first will correspond to large-scale mining, the second to medium-sized operations and the third to small-scale mining.

Five of the seventeen companies that comprise Peru’s large-scale mining sector have received authorization under the government’s plan to reactivate the industry amid the COVID-19 crisis, and will restart operations almost immediately.

Pablo de La Flor, executive director of the national mining, oil and energy society (SNMPE) told BNamericas that ¨approval for the remaining 12 was expected to follow within days.¨ The schedule to reactivate medium and small-scale mining has not been established, but this is expected over the short term, according to de La Flor.

Mexico:

Nearly all mining operations in Mexico were halted at the start of April to comply with the lockdown. The bulk of mining companies operating there confirmed that they halted their Mexican operations. 

That is set to change as Mining companies are planning a mass restart in Mexico from Monday (May 18) after the sector secured ‘essential status’. A phased lifting of lockdown measures announced on May 13 allows mining operations to fully resume from June 1 following a preparation period in which protocols set out by the health ministry are implemented.

But the majority of miners are planning swift restarts this week under rules allowing essential and non-essential activities to resume in areas with no confirmed COVID-19 cases.

Bolivia:

Pan American Silver confirmed it is restarting operations at its San Vicente mine in Bolivia after the government authorized a resumption of mining activities from May 7.

Panama:

Panama has outlined a phased restart of activities. Non-metallic mining will resume in the second of six phases, while the Cobre Panamá copper-gold mine is covered by a separate restart agreement set out by the health ministry, the mine’s corporate communication manager Isabel Dalence told BNamericas. Owner First Quantum Minerals is aiming to restart operations in this month, but signaled the suspension could continue to mid-July. A number of Cobre Panamá workers have died after testing positive for coronavirus.

Dominican Republic:

The Dominican Republic has announced a state of emergency but operations are continuing at Barrick Gold’s Pueblo Viejo, Latin America’s biggest gold mine.

Colombia:

Quarantine measures included in Colombia’s Decree 457 allow for mining operations to continue. Despite this, mining companies such as coal producers Cerrejón and Drummond have suspended or reduced operations to protect workers and neighboring communities.

Brazil:

The Brazilian government declared mining operations essential in late March. The move is aimed at keeping mining operations running despite restrictions imposed on business activity and the movement of people by state and local governments. A number of mining operations have been suspended to meet state level restrictions, including Equinox Gold’s Pilar asset in Goiás state.

Argentina: 

Argentina’s government classified mining an essential activity on April 3, a move which has allowed miners to begin lifting suspensions and operational reductions put in place last month at a string of operations. These include Yamana Gold’s Cerro Moro gold mine, where normal operations are resuming after a partial demobilization of workers last month.

Harris Gomez Group is a Common Law firm, with offices in Santiago, Bogotá, and Sydney. We also have legal teams in Peru, Bolivia, Ecuador, Brazil, and Argentina. Over the last 19 years, we have been supporting foreign companies with their growth in Australia and Latin America. Many of our clients are technology companies, service providers and engineering companies that focus on the mining, energy and infrastructure markets.

To better understand how we can support your management team in the Region, please contact Cody Mcfarlane at cmm@hgomezgroup.com