Mining Central America

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Geography counts in successful mining investment. You may wish to invest again in mines in Alaska now that state voters have defeated Ballot Measure 4 that was designed to bring mining in the state to its knees. Or at least stop Anglo Americans new Pebble Mine.

I have written before that I do not invest in mines in Africa. I prefer to leave that task to people who are there, who are tough, who live in London and who know the colonies, or the Chinese who can.

Another geography that I generally prefer to avoid is Central America. A newly published report from Oxfam captures perfectly my concerns. I refer to the June 2008 publication from Oxfam Metal mining and sustainable development in Central America an assessment of benefits and costs.

This volume does not tell you why to invest in mining or why to avoid investment in mining in Central America. Mostly the volume traces the story of mines in Nicaragua and Honduras. Mostly it gives reasons why mining should not proceed. They conclude that in well run countries many benefit from mining, but in badly run countries, most people do not benefit from mining. They appear to conclude that the latter is the Central American norm, and that with the best will in the world mines will not do anybody in Central America any good, net alone succeed.

And that is my concern. The state of government in most of Central America is questionable. The record of success of mines in Central America is spotty. I suggest we simply keep Central America as an international reserve for middle class tourists and retirees. Keep in mind there are too few rich by the five million a year income standard to bother about.

Goldcorp is one of the more active and successful Canadian miners in Central America. They have one mine: Cerro Blanco in Guatemala and the Marlin mine proposed. They are, however, opposed by almost every young tourist who can make it out of Canada to go see something exotic south of the border. This abstract from Upside Down World captures the dilemma Goldcorp faces in Central America:

There is a huge distance geographically between where the corporate, financial and investor decisions are taken to initiate and extend mining around the world, and the places like San Miguel Ixtahuacan where most of the harms and destruction caused by this type of mining are experienced. There is an even greater distance culturally, ethically and spiritually between the winners and losers in this global business enterprise.

I acknowledge that mining of construction materials flourishes in Central America as elsewhere. From the nations encyclopedia.

Clays, limestone, marble, and sand and gravel for construction were the mainstay of Belize's minerals industry; none was reportedly exported in 2001. The Belize, Sibun, and Monkey rivers, as well as North and South Stann creeks, were the sites of clay, limestone, and sand and gravel operations. Clay production amounted to 2.6 million tons in 2001; dolomite, 31,000 tons; limestone, 320,000 tons; sand and gravel, 360,000 tons; marl, 1.3 million tons; and gold, 6 kg, by stream panning.

Belize is a fun place to visit. At least they speak English. But gravel mining is not my cup of tea. Some good news though if you want to invest in mines in places where it would be nice to have a holiday home. Costa Rica has just lifted a six-year moratorium on mining and approved the Las Crucitas mine to be developed by Calgary mining company Infinito Gold Ltd.

I must note my caveat. What I write above should not be viewed as advice to buy or sell. Although I do advise a trip to Belize and Costa Rica and a nice vacation home if you can afford it. Enjoy.