The LATAM Risk Map
Peru: Produces 12% of world copper. Hosts more than 200 active social conflicts (Defensoría del Pueblo). Las Bambas has suffered recurring community blockades with losses in the hundreds of millions of dollars.
Chile: The "scissor effect" — costs rise while production stagnates. C1 cash costs went from ~130 c/lb in 2018 to 170+ c/lb in 2024 (COCHILCO). The mining royalty reform may reduce Chile's investment attractiveness by 15-25% (SONAMI). EIAs take 3-7 years. More than 40 mining projects blocked or delayed by community opposition (2019-2024).
Argentina: Multiple exchange rates, currency restrictions, and difficulties repatriating profits. When dollar access is restricted, the supply chain tenses — and a tense mining supply chain is a continuity risk.
Africa: The Mirror LATAM Prefers Not to Look At
Mali (2020, 2021), Burkina Faso (2022), Niger (2023) — four government interruptions in three years. Security contracts represent 5-15% of total operating costs in high-risk jurisdictions (Mining Review Africa). South Africa's Transnet rail infrastructure failures generated ZAR 400+ billion in lost mining exports (2020-2024).
The message for LATAM: dependency on shared infrastructure — ports, roads, railways — is geopolitical risk in supply chain form.
OR as Resilience Strategy
McKinsey, BCG produce geopolitical risk frameworks. What they don't do is connect that risk to mine operational preparation. From VSC, the argument is different: Operational Readiness isn't just efficiency. It's resilience.
An operation with well-executed OR has:
- Maintenance systems calibrated for criticality, not statistical normalcy
- Complete operational documentation — the living documentation capturing how this operation functions
- Validated sourcing strategies with pre-qualified alternative suppliers
- Teams trained in contingency procedures
This isn't OR designed in a strategy room. It's OR built in the field, by operators who've seen real geopolitical disruption.
What Boards Should Be Measuring
The indicators that matter and rarely appear on a corporate risk dashboard:
- Percentage of critical spares with a single qualified supplier vs. multiple options
- Critical input inventory level expressed in days of operation, not monetary value
- Percentage of operational procedures updated in the last 12 months
- Number of key positions with a single responsible person vs. trained backups
- Estimated production recovery time after 30, 60, and 90-day access cut scenarios
Most mining operations facing geopolitical pressure today could have significantly reduced their financial exposure by measuring — and acting on — these indicators before the risk materialized.
Schedule a meeting with the VSC team. The conversation is free. The consequences of not having it are not.
ValueStrategy Consulting delivers Operational Readiness and maintenance strategies for mining and megaproject industry in LATAM. Our clients operate in high-pressure environments — political, regulatory, and operational. Our job is to prepare them for all of them.
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