Australian-LatAm investment in the spotlight

Brisbane-based Xstrata Copper said an expansion of its copper projects in Latin America will be fundamental to achieving 60 per cent growth in annual copper output within three years and would underpin the current $7 billion commitment to achieve such a target. The company is currently producing 900,000 tonnes per year (t/y) but are looking to boost that nearer to 1.5 million t/y, according to Charlie Sartain, Xstrata Copper chief executive.

“This is an ambitious programme a strong growth pipeline but new projects now under construction or development in Peru and Chile and to some extent, Argentina, will help to progressively deliver this objective,” he said. Xstrata saw operating profit of $3.9 billion in 2011 with its South American operations contributing 68 per cent of that margin.

“The next major phase will take in the current $90 billion Xstrata-Glencore merger,” he added.

Also on display was Peru’s stock exchange in Lima, which merged with stock markets in Chile and Colombia in 2011. Australia’s equities markets and resources players were encouraged to dual list as a way to tap additional sources of funds for new mining ventures in Latin America.

Peruvian stock exchange boss, Francis Stenning, pointed out that Toronto-listed players were dominant on the Lima Stock Exchange with Canadian juniors dually listed raising some $273 million globally.

In one of the lesser known LatAm stories, Nicaragua made a play to attract investment, which saw a 90 per cent surge to $968 million in 2011 when compared to the year previous. Mining investment is the third largest sector in capturing foreign direct investment.

Javier Chamorro, executive director of PRONicaragua, a lobby group that promotes investment in the country, said: “Foreign direct investment is now 13 per cent of GDP, the highest rate in Latin America, so Australian mining entities coming into our market have a secure investment, operational, geological and socially positive environment in which to make fresh plays,” he said.

He also hinted that a bilateral agreement would benefit both countries just as Nicaragua’s agreements with major trading partners the EU and US do.