Weighing the Risks in South American Basic Materials

http://www.mckinseyquarterly.com/Weighing_the_risks_in_South_American_basic_materials_1969
Authors: Gurlit, Wieland; Mencarini, Eduardo; Montealto, Ricardo
Source: The McKinsey Quarterly
Year: 2007

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Abstract:

* Growing global demand for metals has kindled intense interest in South America's mineral wealth: some of the world's largest—and most competitive—deposits of alumina, bauxite, copper, iron ore, nickel, and zinc.
* But some multinationals, concerned primarily about political risk and macroeconomic volatility, still seem too wary of making further investments.
* Despite the resurgence of populism, overall political and institutional risk in the mining sector is relatively low in most countries, and the macroeconomic situation has stabilized.
* Many attractive growth opportunities remain in South America. But to execute projects, companies need local management teams with a long-term commitment to the region and world-class skills in managing stakeholders.