Developing and frontier markets in Latin America & Caribbean present a potent mix of risk and opportunity for mining, energy, heavy industry and infrastructure development.
The playing field is though, not level. Challenges include radical political positions, fragile institutions, economic turbulence and social division. Competition over land and water combined with poor legal certainty and arbitrary governance remain, particularly in provincial areas. These all create serious bureaucratic hurdles mixed with political risks, especially when resource nationalism, regulation bias, corruption and lobbying from other industries interfere.
Numerous unplanned impacts derail project timelines, upset budget estimates and cause lasting divisions and costs. Labor strike actions are exacerbated by government indifference to aggressive unions who wield voter power. Militant social protest groups continue to be fueled by inflation and populist politics.
Marginalized groups have to resort to direct action in order for their voice to be heard. The clamor from communities, NGOs and demands from provincial government are as loud as ever.
Some projects have been overwhelmed by the scale of opposition, not fully embraced sustainability and a shared purpose as a core project goal or found too many external factors beyond their control. Small-scale exploration projects affected now trade at a severe discount and face a lack of investor interest. Even some billion-dollar resource developments have seen a loss of their social and legal license to operate, their company reserves reclassified and suffered a corresponding fall in project NPV and corporate share-price.
A confluence of conditions exists where sizable opportunities are within reach, yet market conditions are fragile and above ground risks cannot be ignored. Meanwhile, corporate managers face up to the social, financial and reputation implications of every choice.
risk mitigation is not enough.
We seek risk solutions.