Las Condes, Santiago, 4th Dec 2021, ZEXPRWIRE, The Covid19 pandemic has left Latin America as the worst-hit region on earth with Brazil, Ecuador and Peru recording the highest amount of excess deaths, causing more economic damage than anywhere on earth. Yet with investors turning to gold in high numbers, causing prices to reach a record high, there appears a route to recovery for the wider region.
The impact of the pandemic on the industry led to closures of operations throughout the region that resulted in reduced production and higher prices. However combined with lower oil prices and falling local currency value alongside massive multi-national government investment, this has increased the profit margins for both gold and copper across the region.
The value of gold has increased steadily during the pandemic, outstripping paper currencies as investors looked to take advantage of the limited production of precious metal and through increased demand, this has resulted in a big rise in the value of gold as investors shifted from traditional financial products and into precious metals. This interest saw a 34% increase in the price of gold during the first three quarters of 2020.
It’s a similar story for copper, with Latin America accounting for 44% of global production. The on-going demand for less polluting vehicles, for example, has led to an increase in the demand for copper, which is needed for the production of electric cars particularly in the European Union and China.
Latin America is in a unique global position to benefit from the good fortunes of the mining industry because it is well placed in the global market, producing more precious metal than anywhere else on earth, outstripping local demand and creating ideal conditions for exports. Alongside gold and copper, the region accounts for 51% of silver output, 20% of zinc and iron ore and holds over 50% of lithium reserves.
The relatively low-cost operations throughout the region, with mines switching to solar power and hydro-electricity creating more benefits with consumers willing to spend more for sustainably produced metals. An increase in environmental regulation has placed the region on a stable footing for more ethical mining practices.
With more operations coming online, major new deposits of metals are being discovered regularly. Combined with favourable fiscal policies across the region, investors are increasingly benefitting from shifting their assets from traditional financial products to the stability of gold and other precious metals being mined throughout Latin America.
Golden International Mining Group
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