In this story from Investing News, Remi Piet —senior director of the Resources and Infrastructure practice at Americas Market Intelligence— shares his thoughts on the due diligence that investors in the region must exercise.
Remi Piet, senior director of natural resources and infrastructure practise at Americas Market Intelligence, says there’s opportunity in Latin America, but investors must complete due diligence to get the full picture and understand the situation on the ground.
Speaking with the Investing News Network at Mines and Money Americas in Toronto, Piet shared his thoughts on investing in the region, from developments in national governments to how to approach local communities and prevent investments from falling over.
With elections on the horizon and new governments still making their mark, he said the continent, which is home to mammoth copper mines, huge iron ore projects and a burgeoning lithium sector, is an attractive prospect for anyone that wants to invest in mining.
INN: Since it’s the first time we’re talking, can you let our audience know what your role is at Americas Market Intelligence? What do you do there? What’s your background?
RP: Of course. So basically Americas Market Intelligence is the leading consultancy for Latin American affairs. We have several practises, whether looking at the payment sector or healthcare sector, logistics sectors. I actually lead the practise on infrastructure, natural resources and energy.
In that specific practise, we take a more long-term analysis of political, socioeconomic elements to make sure to support businesses and investors in different countries. Our objective is for investors and companies in those sectors to understand the particularities of every single jurisdiction. See what risks they have to face — potentially political risk, economic, social, reputational risk — that might impact the value of their investment and also the value of the shareholding.
So that’s our angle here. And we cover every country in Latin America, even smaller jurisdictions such as Guyana, Suriname, which many companies don’t go to. We have a specific focus on all of those countries trying to provide value for our clients and support the sustainability on all aspects, both contract [and] financial. But also sustainability in terms of working with local communities, being accepted inside the countries without facing potential backlash or a potential local election that will slow down or block or halt the investments. That’s why we’re trying to provide that specific intelligence for people to be able to carry through and implement the right investment.
INN: We’re here at Mines and Money in Toronto, and you were part of a panel talking about Latin America and investments there. Have we seen a change of attitude towards foreign investments in the region?
RP: First of all, talking of the region as a whole is often an error that investors are taking, because each country is obviously different. Inside each country, each province actually operates by different rules. No, I’m not talking about regulation, which is fairly organized at the national level, but about different sets of risks and problems that you can find locally.
The main difference and main change over the last 10 years has been potentially at the national level. There’s more interesting policies and reforms to support the mining industry, such as political change in Colombia. I was there two days ago and [they are] implementing a series of reforms supporting the mining sector. We’re going to see more of the same thing in Brazil soon.
Another government, Chile, is very proactive in terms of supporting the mining industry. However, on the other side, we have a reinforcement of local opposition that is filled often by information that might not be very relevant and is sometimes financed by criminal organizations, or opponents of mining locally for different reasons. So you have an empowerment of local communities that might shut down some investments. We’ve seen this in Colombia with La Colosa. We see this across the continent with between 70 and 80 local referendums in the books.
So the idea here … is not to stop at the macro level and listen to governments that will always tell you, “we want a full jurisdiction for mining, we’ll support your investment.” But also to understand that [miners should] do their due diligence, [have a] clear approach to local communities so that they actually can get them on their side and not face local backlash down the road.
INN: In your opinion, what would be the best jurisdiction to invest in right now?
RP: I was fortunate to work in Africa, the Middle East and then Latin America. I believe that Latin America is the most favorable environment for investment over the next few years in the mining sector.
The best jurisdiction — there’s no such one best jurisdiction. Even in different countries, in different jurisdictions that might seem appealing, there are some regions where it’s complicated to do business and others are much more favorable. In other jurisdictions, they might be more challenging.
There are actually some very good opportunities to look at there. So you have to be more detail oriented. However, if I have to point out a key jurisdiction that is sometimes overlooked: the Guyana shield has obviously a geological interest with gold mining, and there’s strong potential in French Guyana with the Macron government in France favoring industrial mining. In the case of Suriname, there’s also an interesting approach to be taken if you mitigate some kind of political reputation or risk with the president in place. And in Guyana it’s also interesting with the development of mining there that’s really ramping up to a favorable investment environment.
Read the rest of the interview here.