The role of governance in large-scale mining sector in Latin America

Abstract

The COVID-19 pandemic triggered a surge in global raw material demand since 2021, suggesting the onset of a potential minerals and oil supercycle. This rebound has been driven by post-pandemic economic growth, infrastructure expansion, the transition to renewable energy, and sector electrification. These dynamics offer an opportunity to improve mineral resource governance, as highlighted by the Economic Commission for Latin America and the Caribbean (ECLAC), which stresses the role of institutional design. In this context, State Mining Enterprises (SMEs) have gained renewed importance, as several countries promote them to strengthen state ownership, foster innovation, and support public investment. While state-owned enterprises dominate the oil, gas, and mining sectors globally, they often face challenges related to inefficiency and corruption. This paper analyzes the governance of SMEs in Chile, Ecuador, and Bolivia, focusing on differences in sustainability practices, transparency, and their capacity to promote innovation and value creation. In Chile, CODELCO and ENAMI demonstrate a stronger institutional framework and lead innovation efforts within the region. In contrast, Bolivia’s COMIBOL and YLB struggle with operational implementation and lack effective oversight mechanisms. Ecuador’s ENAMI EP is shifting its strategy toward diversification beyond mining, particularly in energy and infrastructure. However, sustainability and transparency standards remain weak across the three countries, with CODELCO standing out as the only enterprise consistently aligning with international best practices.