VANCOUVER (miningweekly.com) – New analysis by the research arm of the Fitch Group, BMI, forecasts water scarcity and contamination in Latin America will drive increasingly stringent environmental regulations in the region over the coming years.
In Chile, the environmental regulatory body has been more aggressively pursuing and fining water mismanagement in the mining sector, levelling charges against Antofagasta Minerals’ Los Pelambres copper mine and effectively suspending Kinross Gold’s Maricunga gold mine, in 2016.
In Argentina, Barrick Gold paid a $9.8-million fine for a cyanide spill at the Veladero gold mine in 2016, agreeing to increase water monitoring at the operation in response.
In Brazil, following the 2015 tailings dam burst at the Samarco iron-ore mine, which killed nearly 20 people and polluted hundreds of kilometres of rivers, parent firms Vale and BHP Billiton face a $50-billion lawsuit for damages.
In March, a Brazilian judge suspended the lawsuit as the firms negotiate with prosecutors.
BMI highlighted Chile, Argentina and countries in Central America as particularly likely to enforce stricter water regulations on the back of scarcity, contamination or a combination of both issues.
While Chile boasts above-average water resources per capita, according to the latest UN water data from 2012, the country’s mining industry is concentrated in the Atacama desert, where freshwater scarcity is much more acute.
For instance, in Chile, desalination plants will be increasingly popular, if not mandated, as freshwater scarcity in the Atacama desert pushes miners to invest in alternative water sources.
In Peru, President Pedro Pablo Kuczynski’s administration will take an inclusive approach to help small-scale gold miners comply with regulations through reducing red tape and offering incentives such as banking services.
In April, Argentina’s government announced plans to invest $44-billion in water infrastructure, including a sewage system and treatment plant.

Water scarcity, pollution to take shine off Latin American mining sector.
A recent example of this trend is what happened in El Salvador, which last month passed a law that bans all mining for gold and other metals in the country, in an effort to protect its environment, particularly its water streams.
BMI expects the usage and treatment of water in the mining industry to come under increasing scrutiny in Latin America, as droughts or arid environments in key regions heighten tension between miners and local communities and previous incidents lead to additional regulations.
The researchers name Chile, Argentina and countries in Central America as the most likely to enforce stricter water regulations due to scarcity, contamination or a combination of both issues: In Chile, the environmental regulatory body (SMA) has been more aggressively pursuing and fining water mismanagement in the mining sector, levelling charges against Antofagasta Minerals’ Los Pelambres copper mine and effectively suspending Kinross Gold’s Maricunga gold mine in 2016.
In Argentina, Barrick Gold paid a $9.8mn fine for a cyanide spill at the Veladero gold mine in 2016, agreeing to increase water monitoring at the operation in res ponse.
In March, a provincial government suspended operations at the mine due to a pipeline issue and, in April, Barrick announced the sale of a 50% stake in the Veladero mine to Chinese firm Shangdong Gold Group for $9.6mn.
In Brazil, following the 2015 tailings dam burst at the Samarco iron ore mine which killed nearly 20 people and polluted hundreds of miles of rivers, parent firms Vale and BHP Billiton face a $50bn lawsuit for damages.
In March, a Brazilian judge suspended the lawsuit as the firms negotiate with prosecutors.
Tighter regulations will come at a time when illegal gold mining is once again picking up in the region on the back improving prices for the yellow metal.
“When the negative externalities of gold mining, namely mercury and cyanide exposure to water sources, are left unaddressed, public opinion on all mining activity can motivate extreme legislation,” BMI concludes.