Exploration has suffered in South America due to low gold and base metals
prices. Most countries saw either a reduction in activity or even total
withdrawal by firms that were previously active. However, South America still
attracts the most exploration dollars in the world – 27% of global gold
exploration and 38% of base metals. Argentina has seen a constant reduction in exploration
expenditure since 1997, with expenditure in 2000 totalling $110 million ($130 million in 1998).The floating of the Brazilian
currency on world markets resulted in a collapse against the US dollar of up to
40%.
In general low growth rates are anticipated for most of the countries in the
region. Colombia suffered the worst performance in 50 years, whilst
Brazil’s currency woes did not assist matters for the continent. An
important political development that will impact on the mining and exploration
scene is the signing of the Dcampos de Hielo treaty between Chile and
Argentina. This will allow cross border mining and prospecting. This pact
already impacts several highly potential projects straddling the border, in
particular Barrick’s Pascua deposit, earmarked to be South America’s
largest gold mine.
