Regional Pulse: 13 December 2022

Southern Pulse’s weekly review of need-to-know events curated for people who do business in Latin America.

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Mining was the most attractive sector for M&A in 2022

On 8 December 2022 Ambito Financiero reported that the mining sector led mergers and acquisitions, accounting for 30% of all deals over the past 11 months. The largest deal was the purchase of lithium exploitation rights in Salta province by China’s Ganfeng Lithium from Canada’s LSC Lithium for USD962 million. The second largest transaction, worth USD175 million, was made by Switzerland’s Glencore, which bought an 18.5% stake in the Mara copper mine in Catamarca province from US company Newport.

Hydroelectricity turbine from China arrives in Santa Cruz

On 8 December 2022 the first of three Chinese-made turbines to be used in the Jorge Cepernic hydroelectric plant arrived in the southern Santa Cruz province. The Jorge Cepernic plant is part of a larger project that also includes the construction of the Néstor Kirchner plant and 170 kilometers of high voltage transmission lines. Planners expect the project will generate 5.2GWh per year, providing energy for 1.1 million households once complete in 2024. The construction is financed by China Development Bank.

CFK sentenced for corruption

On 6 December 2022 Vice President Cristina Fernández de Kirchner was found guilty of embezzlement involving public contracts she oversaw during her 2007–2015 presidential tenure. The judge sentenced Kirchner for six years in jail and banned her from public office, but Kirchner still can appeal. Kirchner said the court was politically motivated. The former president only faces house arrest if both an appeals judge and the Supreme Court uphold the sentence.

President accuses opposition and judges of collusion

On 4 December 2022, President Alberto Fernández ordered a judicial investigation into a corruption case against Vice President Cristina Fernández de Kirchner after Telegram messages appeared to suggest collusion between the trial’s prosecutor, Julián Ercolini, an opposition politician, judges, a former intelligence agent and the powerful media group Clarín. All the figures mentioned in the chats claim the messages are fake. While the evidence has no judicial value as it was obtained illegally, it is being used by the government to claim that Fernández de Kirchner was submitted to a biased trial.

Enel to leave country due to complex local regulations

On 4 December 2022 national media outlet Revista Noticias reported that Italian electricity giant Enel announced its decision to leave the country in November because of concerns over regulatory framework changes and uncertainty over state subsidies for tariffs. Previously, the company had only said it was divesting from high-risk, low-return markets like Argentina, Peru and Romania. Enel owns subsidiaries EDENOR and EDESUR, which provide power to the Buenos Aires metropolitan area, home to one in four Argentines.


Bolsonaro supporters try to storm federal police HQ

On 13 December 2022, supporters of President Jair Bolsonaro attempted to storm the Federal Police headquarter in Brasília after a prominent pro-Bolsonaro protest leader was arrested earlier that day. The rioters, who were later dispersed by police, baselessly claim Bolsonaro lost the recent presidential election on fraudulent grounds. Multiple vehicles and some buildings were set on fire.

Bolsonaro-aligned Air Force general agrees to Lula nominee

On 10 December 2022, the Commander of the Air Force, Brigadier General Carlos de Almeida Baptista Júnio, who was an outspoken ally of President Jair Bolsonaro, complemented President-elect Luiz Inacio Lula da Silva’s choice for his successor, Marcelo Kanitz Damasceno. This has been seen by some analysts as a sign that part of the military establishment aligned with Bolsonaro has come to terms with Lula’s victory, despite significant hostility to the incoming administration.

Lula picks Haddad as Finance Minister despite investor concerns

On 9 December 2022, President-elect Luiz Inácio Lula da Silva announced that Fernando Haddad will be the next Finance Minister. Markets have been jittery about Lula’s choice of finance minister amid growing indications that the incoming government will have a more expansionary fiscal policy. Past market movements suggest the financial markets were especially concerned about Haddad, a PT heavyweight and former presidential candidate.

New plan to incentivize fracking announced

On 7 December 2022, the Ministry of Mines and Energy announced the “Poço Transparente” (Transparent Well) program to incentivize fracking on land already authorized for oil and gas exploitation. Companies which already have contracts in these select oil and gas blocks will receive research and development subsidies for two years, while paying 5% production royalties.


FTA with EU gets cybercrime, environmental and AML clauses

On 9 December 2022, Foreign Minister Antonia Urreloja signed an updated free trade agreement with the European Union in Brussels. The original agreement, from 2002, encompassed issues related to trade and business, while the new text includes new concerns such as cybercrime, climate change and money laundering. Far-left figures and entities in President Gabriel Boric’s coalition criticized the agreement, including mayor of Recoleta, Daniel Jadue, who is a leading figure in the country’s Communist Party. The text still has to be approved by both parliaments to enter into force.

Gloomy wage and GDP figures published

On 6 December 2022 the National Bureau of Statistics (INE) reported that real wages (adjusted for inflation) fell 1.7% in October (latest available data) compared to the previous month, marking the thirteenth consecutive month in workers’ purchasing power. INE data also found that GDP fell 1.2% year-on-year in October.

Credicorp president says reforms are hurting investment

On 5 December 2022 Guillermo Tagle, president of Credicorp, a leading financial institution in the country, told national newspaper La Tercera that ongoing discussions over tax and pension reforms, combined with inflation, are discouraging local companies from further investment. Tagle added that local markets were also worried about the government allowing fresh withdrawals from private pension accounts. He also said regulatory uncertainty and bad macroeconomic conditions were pushing away international investors.

Major conglomerate wants new lithium auction over corruption claims

On 5 December 2022 Francisco Xavier Errázuriz, president of commercial conglomerate Inversiones Errázuriz, asked state-run development agency CORFO to hold a new public bid for the lithium-rich Salar de Atacama, noting that the license-holder SQM allegedly engaged in electoral bribery in the past decade. SQM currently has the license to extract lithium in the area until 2030. SQM is the country’s largest company, with a market value of USD28 billion, while Inversiones Errázuriz group is one of Chile’s largest conglomerates.

Cadem poll shows insecurity concerns at record high

On 4 December 2022 pollster Cadem found that 80% of respondents are concerned about insecurity — the highest figure in polling history. The poll suggests the main concerns over security include the conflict between indigenous Mapuche groups and security forces in the south, and residential and public robberies. Most respondents blamed the government and migration, but also want security forces to have more autonomy over how they deal with crime.


National unions call for 20% raise of minimum wage

On 10 December 2022, unions made public their proposal for a 20% increase in the national minimum wage amid talks with both the government and businesses. Business groups have not suggested a number yet, but business’ think tank ANIF suggested a 13.8% increase and said that a higher amount might lead to more informal jobs. The deadline set by law to get to an agreement is 15 December.

Ecopetrol to increase spending by 13% in 2023

On 9 December 2022 the state-run oil company Ecopetrol announced that it would invest up to USD6.6 billion in 2023 — a 13% increase compared to 2022. Ecopetrol’s board said its main goal was to speed up the green energy transition. In that regard, 23% of total investment will be in low carbon and zero emission activities. As for oil production, the company raised its production goal to 725,000 barrels of oil per day — up from the current goal of 705,000. The plan will be financed with Ecopetrol’s own resources.

Government to ban open pit coal mining

On 9 December, The president of the National Agency of Mining (ANM) Alvaro Prado said the government will no longer grant concessions to exploit coal in open pit mines. Prado also said that ANM will not grant concessions for mining in areas that are considered to be legally excluded from mining. There are currently 1,816 areas exploited by private concession-holders that overlap with zones banned from mining, according to the Agency. Prado added that the Ministry of Environment is already making mining concessions more difficult, but argued that the country still has 7,200 areas granted to mining.

Petro signals progress in peace talks with ELN militants

On 5 December 2022, President Gustavo Petro announced the government and the country’s largest active guerrilla group, the ELN, had agreed to allow indigenous groups displaced by armed conflict to return to their lands. The peace talks are part of Petro’s “Total Peace” agenda, which involves dialogue with multiple armed groups. The ELN held negotiations with previous administrations in the past that failed.


China takes lead in oil purchases

On 10 December 2022, the Ministry of Energy and Mines said the country will export around 111 million barrels of crude oil in 2023, almost half of which (52 million) are already purchased by three Asian companies: Petrochina, Petrotailand and Unipec. The rest will be traded at international spot market rates.

Constitutional Court blocks enhanced police proposal

On December 7 2002, the Constitutional Court blocked the National Assembly from including a reform that would allow the police to operate alongside the military if approved in a national referendum set for 5 February. The Court removed the change from the vote, declaring that only the National Assembly can constitutionally reform military-related affairs. Lasso has been trying to curb an unprecedented wave of violence by asking voters to grant the government enhanced security powers.


Statutory paid leave to double from 2023

On 8 December 2022, the lower house approved a reform to labor laws that increases the statutory leave for workers from six to 12 days. Initially proposed by the Senate, the reform had been previously stopped by committees in the lower house, but was ultimately approved after strong public pressure. The reform will permit workers to enjoy 12 days of vacation during their first year of employment, with the right to take them consecutively. The change is scheduled to take effect next January 2023.

Government is considering Castillo’s asylum request

On 8 December 2022, Secretary of Foreign Affairs Marcelo Ebrard announced that the Mexican Embassy in Peru had initiated asylum proceedings for former Peruvian president Pedro Castillo after he formally requested President Andrés Manuel López Obrador’s support. Peru’s political scenario was shaken last week after Castillo attempted to dissolve Congress and decree a government of exception. López Obrador has refused to recognize the legitimacy of the new executive, Dina Boluarte, and ignored the Peruvian Congress’ request that he not interfere in its internal affairs.

Controversial electoral reform bill clears lower house

On 7 December 2022, the lower house approved changes to secondary electoral laws that significantly cut the National Electorate Institute’s (INE) budget and limit its power. Critics claim the changes will reduce electoral oversight and favor the ruling MORENA party. The changes come after legislators initially rejected President Andrés Manuel López Obrador’s constitutional initiative on the same matter. Though the draft decree has now gone to the Senate for likely approval, opposition legislators have said they will challenge its passing before the Supreme Court.


Pro-Castillo demonstrations continue

On 13 December 2022, protests in support of former president Pedro Castillo reached their seventh day, with seven demonstrators killed. The protests started in Lima moments after the arrest of the former-president on 7 December 2022 The protests have since spread to other cities and rural areas, where numerous important highways have been blocked. Demonstrators are calling for new elections and the dissolution of Congress.

President Boluarte open to early elections

On 12 December 2022, President Dina Boluarte said she would introduce a bill to Congress that sets the general elections for April 2024. Congress had already been debating holding early elections in 2023, with an eye to reducing then-president Pedro Castillo’s term to three years

President Pedro Castillo ousted and arrested

On 7 December 2022, Congress ousted President Pedro Castillo by 101 out 130 votes, after Castillo delivered a televised address calling for Parliament to be dissolved and a national emergency instituted. Castillo was accused of attempting a coup and was arrested shortly after the vote. Vice President Dina Boluarte was sworn in as the country’s first woman president shortly after.

Wherever you do business in Latin America, Southern Pulse has the expertise, the network, and the relationships to help solve your toughest operational challenges. Want to learn more? Let’s chat.




Southern Pulse provides strategic advisory services to help businesses operate successfully in Latin America.

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Southern Pulse

Southern Pulse provides strategic advisory services to help businesses operate successfully in Latin America.