LatAm Daily Briefing: Covid-19 Halts Argentina’s Shale Output; Brazil Begins Vaccine Trials; Peru to Emerge from Quarantine on July 1st

29 June: Find out what's been happening in Latin America with our latest news update.

29 June: Find out what's been happening in Latin America with our latest news update.


The Covid-19 pandemic is having a severe impact on Argentina’s shale production, with the country in lockdown and following the slump in oil prices as a result of the collapse in global demand, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA). “The pandemic and the oil price collapse could be the “final straw that sends Argentina’s ailing ‘Dead Cow’ to slaughter,” the report’s authors said, referring to the Vaca Muerta shale play, on which Argentina and state oil company YPF, which is developing the area with international partners, had been pinning hopes of a shale boom. The fall in demand has led to drilling being ceased, and the number of rigs operating in the country has fallen to zero, from around 60 in 2019.

Volunteers in Brazil have begun receiving a trial vaccine against Covid-19 developed in Oxford, UK, by the the Oxford Jenner Institute. Brazil is the first country in Latin America to undertake trials, and which will involve 5,000 volunteers in three Brazilian cities. The vaccine is also currently undergoing trials in the UK. Brazil’s health regulatory body ANVISA approved the inclusion of Brazil in the clinical trials, and which are being conducted in partnership with pharmaceutical company AstraZeneca, and are being sponsored entirely by Brazilian entrepreneurs. Brazil is the worst-hit country in South America by Covid-19, with the death toll currently at 57,658, with more than 1.35 million confirmed cases.

Copper prices hit a five-month high on Friday amid fears that output will be disrupted in Chile, the world’s largest producer, due to the increase in Covid-19 infections in the country’s copper mines. State-owned mining company Codelco suspended refinery and foundry operations at its Chuquicamata division to prevent a further spread of the virus. Chile’s mining unions have been complaining in recent weeks of the rise in infections at mining facilities, which, they say, is putting the lives of miners and other workers at risks, and have called on Codelco to implement better safety procedures. Copper prices increased by almost 2% during last week to hit their highest level since the beginning of the year, at $5,952 per ton, and which is expected to reach $6,200 per ton by the end of the year, according to a forecast by Capital Economics.

Colombia’s capital Bogotá may be forced to impose a new lockdown to contain the spread of Covid-19, following an increase in infections, and to prevent a collapse of healthcare services. Bogotá’s Mayor Claudia López said over the weekend that once the city’s intensive care units pass a 75% occupancy rate she will declare a red alert and suspend the economic reactivation process that has been implemented by the federal government. She has put pressure on President Iván Duque to reverse the country’s economic reactivation plans, but Duque has expressed his opposition to the country continuing in lockdown. Virus cases surged in mid-May after a tax-free shopping day went ahead, and which was heavily criticized. López and Duque will meet on Tuesday to discuss the plans for the capital. The country’s death toll from the virus is currently 3,106, with more than 97,000 confirmed cases.

Mexico’s finance ministry on Monday announced the extension of several financial sector and housing measures aimed at supporting people and companies hurt by the economic fallout from the Covid-19 pandemic, Reuters has reported. The measures are in addition to those announced in March, at the start of the lockdown period, by Finance Minister Arturo Herrera, and which included Mexican banks allowing clients to defer interest payments and principal on loans. He said on Monday that banking regulator CNBV would give regulatory leeway to banks so they can focus on helping people. Mexico has begun a gradual reopening of its economy despite the number of Covid-19 fatalities and infections continuing to rise. The death toll from Covid-19 currently stands at 26,648, with more than 217,000 confirmed cases. 

Peru will lift its quarantine measures in most of the national territory on July 1st as the country aims to restart its economy, although mandatory isolation orders will remain in place in some areas, while the country’s borders will remain closed and the elderly and children will still be subject to movement restrictions. The government set out a four-phase reopening of the economy, but is still in the second phase, with the third phase to begin with the lifting of lockdown measures at the start of July. The International Monetary Fund has forecast that the country’s economy will contract by up to 13.9% this year. Peru is the second worst-hit country in South America, with the Covid-19 death toll currently at 9,317, with more than 279,000 confirmed cases.

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