In Latin America, gold is everywhere. From Mexico's northern border, along the Andes, through the Amazon tropics, to the southern reaches of Patagonia, the yellow metal abounds. World class mines or deposits, as well as smaller scale production, can be found in every country where relevant exploration has taken place and annual production has soared 45% in the last 10 years, almost three times the rate of the world excluding Latin America.

In terms of net ounces, Latin American annual gold mine output grew by 5.9 million ounces (Moz) from 2004-14, accounting for 35% of a total global increase of 16.6Moz, thanks in large part to Mexico. World gold mine production amounted to 93.6Moz in 2014, and regional production accounted for 20% of that with 18.9Moz, according to figures from CPM Group. (Regional calculation includes Mexico, Central America, Caribbean and South America)

In general terms, the growth can be attributed to the boom in gold prices during the 2000s, which drew a varied set of investors to the metal and created unprecedented access to capital for mining exploration and development. But is there something special about Latin America that led to faster production growth here? Excellent deposits and discovery potential certainly played a role, as did a growing investor interest in underexplored emerging market jurisdictions.

El Gallo 1 gold mine, Mexico. Credit: McEwen Mining

Indeed, global growth in 2004-14 was largely attributable to newer mining countries. Apart from Latin America, production soared in China, Russia and some African countries. China alone added 7.7Moz of gold mine capacity, a 113% increase accounting for 46% of global growth in the last 10 years. Latin America also started from a much smaller production base than the gold kings of previous decades, Australia, Canada, South Africa and the US, the four of which registered a net production decrease of 22% in 2004-14, dragged down by a considerable drop in South Africa, the CPM figures show.

Latin American gold output is forecast to expand more than 1Moz in 2015 and with a large pipeline of projects on the way, the region is sure to continue to provide a significant portion of the world's gold mine supply for the foreseeable future. But can it reach its true potential? Massive gold reserves are on hold in countries including Chile, Colombia and Peru due to a more restrictive investment climate and, as or more important, socio-political and environmental permitting challenges.

Note: There are many sources of gold mine production data. We have chosen to use those from the CPM Gold Yearbook 2015 for their historical completeness and proximity to official country estimates.

Figure: Total Latin American Gold Production

Figure: Major Global Net Gold Mine Production Changes


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