1. General Characteristics
Although Uruguay has a varied subsoil, it has a strong origin on crystalline terrains from pre-Devonian ages.
Crystalline terrains crop out mainly in the south of Uruguay and are an extension of the Brazilian Shield. The crystalline outcrop area covers nearly 44% of the national territory and it is divided into two geochronologic provinces: a Craton province dating more than 1800 million years and an Oriental province between 700 and 600 million years old. The pre-Devonian petrotectonic units are subdivided into: volcano sedimentary zones with low metamorphism, a high deformation rate; and granite-gneiss grounds with a high metamorphism and a low deformation rate.
Both the volcanic-sedimentary mobile belts and the granite-gneiss terrains present areas with a higher deformation rate (remarkable shearing areas) to which most deposits or outcrops of known metallic minerals, especially gold, are related. In the middle-Palaeozoic, few sedimentary basin systems developed which were not affected by orogeny.
During the Mesozoic, a Cretaceous rift system related to the Southern Atlantic gap formed small aulacogens, some of which have oceanization characteristics and few intrusions of mafic magmas, as suggested by the considerable gravimetric anomaly existing in Laguna Merin.
Caenozoic and Quaternary history offers plenty of information, especially in the field of edaphic and large vertebrate fossil palaeontology.
2. Geological Setting and Discovery Potential
The geology of Uruguay consists of a basement of Pre-Cambrian supracrustal rocks partially covered by younger sediments and flood basalts. The supracrustal lithologic package includes a broad spectrum of intrusive, extrusive and sedimentary rocks ranging from large alkaline crystalline plutons, belts of felsic to ultrabasic volcanics and a full suite of sediments. The country is split in two by the major north to-south Piri polis Fraile Muerto crustal fracture zone (PF), which extends northward into Brazil and southward into Argentina. The PF structure divides the country into two distinct geological domains, the characteristics and origins of which are very puzzling with regard to their potential for the formation of certain types of precious metal and diamond deposits. Geological domains - virtually identical to these which in geological ages are thought to have had genetic ties with the basement rocks of Uruguay- host some of the major precious metal and diamond deposits in the world. Additionally, supracrustal rocks, such as those found in Uruguay, are ideal hosts for an assortment of other minerals commonly derived from these assemblages, including: silver, nickel, copper, lead, zinc, chromite, platinum group metals and non-metallic minerals such as asbestos, talc, apatite and magnesite.
Of particular interest for gold exploration programmes, Uruguay hosts a series of relatively unexplored Archaean- style bimodal greenstone belts and regional-scale shear complexes, comparable to those of the prolific gold- producing regions of western Australia, eastern Canada and southern Africa. Unlike these areas that are famous for their gold, and which have all been successfully explored and mined for over 70 years, mineral exploration in Uruguay is still in its infancy and its true potential may only just be emerging.
The Florida Greenstone Belt ("FGB") is a good example of a highly prospective, under-explored geological formation. It is a 300 kilometre long Archaean or lower Proterozoic greenstone belt in southern Uruguay, with an anomalous gold geochemical signature throughout its length. In the past few years, modest exploration of the belt has yielded two commercial gold deposits and generated several additional prospective gold-enriched areas which will be further explored.
The Rivera Belt, in the north of Uruguay, is another pertinent example of a highly prospective terrain containing numerous large scale shear complexes like that hosting the new San Gregorio gold deposits. The San Gregorio gold mine was recently re-opened in the small Minas de Corrales mining district, that had been left idle for over 80 years. The 1997 commissioning of a modern gold mine and 2500 tonne/day milling complex illustrates the untapped discovery potential of that region. Another significant fact is that in 1996, during geophysical surveys, a 100 kilometre continuation of the controlling structures which host the new gold mine was identified, and this feature is only now beginning to produce encouraging results.
The number of licences granted for gold prospection and exploration has soared since this metallic mineral potential was acknowledged. From six issued in 1989, DINAMIGE has delivered more than 70 in 1997.
For about 150 years, before diamonds were discovered in South Africa, Uruguay's neighbour Brazil was the world's leading producer. Considerable exploration and production of diamonds is under way in Brazil at present. Prior to the drifting of the continents and the break-up of the ancient continent of Gondwana, what is now Uruguayan territory bordered with today's Namibia. Namibia is still a significant producer of gemstones. In both Brazil and Namibia, diamonds are recovered from sediments that were formed by erosion and redeposition, distant from the original diamond-source areas. Geological theory, based on studies of Archaean basement rocks, suggests that Uruguay presents many geological features that indicate that it could host primary diamond deposits. Theoretically, due to certain attributes unique to Uruguayan geology, some diamond specialists consider that Uruguay is the most attractive target area in the South American continent for preserved diamond source rocks. The unique geological characteristics of the basement rocks in Uruguay include the relative stability of the Archaean Craton through geological time, its position relative to the ancient continental margin, deep-seated crustal fractures and the recent recognition of kimberlites penetrating the Archaean Craton. To date, 11 diatremes have been found in the country. This has led to the granting of about 20 licenses for diamond exploration, and several areas started to be drilled for that purpose.
3. Available Information
The State, through the National Mining and Geology Directorate (DINAMIGE), has coordinated a series of geochemical and geophysical surveys in Uruguay. The purpose of these studies was to obtain more in-depth information concerning the mining potential of the country, thus facilitating investment in this sector. The most recent surveys were conducted together with the following agencies:
The Bureau de Recherches Geologiques et Minieres (BRGM French Mission) mainly carried out prospection to be used in preparing the Mining Inventory of metal minerals.
A German Geological Mission (BGR, Hannover) provided training for the staff and set up a data base on several mineral resources from a geological-mining point of view.
A German Geophysical Mission (BGR, Hannover) did the final implementation of applied geophysical prospecting techniques, to be used in searching for different mineral resources as well as for ground water.
A U.S. Geological Survey Mission studied ultramaphic rocks; and agreements were entered into with the University of Quebec (Canada) for the training of experts.
An International Experts Mission (Argentine National Geological Services Office, European Community, Bolzano Geo-Consulting from Italy and CPRM from Brazil) worked on specific areas, such as training courses, deposit assessments, etc.
At the same time as the Government enhances the promotion of the Uruguayan mining industry, Uruguay has been making continuous efforts aimed at improving the information available to investors in the mining industry. The following information is currently at their disposal:
This year the information listed above, which is available to all investors, will be supplemented by the following: A geographical information system (GIS) of the whole country and applied to the Mining Registry is available. GIS enable a quick geographic location of the available areas for which mining licences can be obtained.
Also, there is a geological cartographic plan, which is currently being published and contains data about mineral resources that are already known and information related to active and non-active quarries, geophysical and geochemical data, studies based on satellite imaging, alluvial prospection, and so on.
|GEOLOGICAL MAP OF URUGUAY|
The Uruguayan mining sector has traditionally been based on the exploitation of non-metallic minerals for the construction industry, the glass and ceramics industries, as well as for other industrial applications. Among those inputs the following can be highlighted: sand, broken stone, gravel, pebbles, bentonite, limestone, dolomite, quartz, feldspar, loam, talc, gypsum and clay. Ornamental rocks such as granite, marble and flagstones are also exploited, and so are semi-precious stones for jewellery: agates and amethysts. The ongoing extraction projects operating with these minerals exceed 350 facilities, mostly at a small scale.
In the last few years, the Uruguayan mining scenario has started to change with the revival, after having remained idle for many years, of metallic minerals prospection and exploitation. Recently, diamond exploration has been added to this list.
EVOLUTION OF LICENCES FOR PROSPECTION|
AND EXPLORATION, 1992- 1997
Thus, the country has opened its doors to investment inflows favoured by both national legislation and the propitious business environment that now prevails.
Success is already manifest. Mining output, which only accounts for 0.2% of Uruguayan GDP, has grown at a yearly pace of almost 4% over the last five years, and two projects were implemented, one on gold production and the other one on cement production, where the quantitatively most significant investments were carried out in 1996. The acknowledgement of this potential has led to a strong increase in the number of applications for prospection and exploration licences, and at present more than 100 licences are in force on the subject of gold. Investments made on exploration, which used to be negligible in the early 90s, have been USD 5 million in 1997 and they are expected to increase two-fold in 1998. In 3 years Uruguay has seen investments on exploration rise by 300%.
In spite of this growth, the challenge for the Uruguayan mining industry is still that of acquiring a better knowledge about the potential of our country for commercial operation purposes. At present approximately 5,000 km2 of Uruguayan territory is the subject of prospection by private investors, this means that it is still feasible to explore 90% of its surface. This is the target that the mining policy is now emphasising and that is why a secure and appropriate framework has been developed for mining investments.
2. Metallic Minerals
When the San Gregorio mine started producing gold and silver in 1997, it sent out a clear signal of Uruguay's potential in these precious minerals.
In the first year of operation San Gregorio mine produced 66,000 ounces of each of these metals, and the gold reserves of the mine are estimated at about 600,000 ounces. The processing plant, which required a major investment, has the capacity to process 2,500 tons a day and therefore it is expected that the 1998 output will be 70,000 ounces each of gold and silver.
This project reopened areas that had been exploited by French and English companies until 1915. The average grain of the ore ranges from 2.8 to 3.0 grams per ton. The mineralised area covers a stretch of land that is about 400 metres long with a width that varies between 2 and 30 metres and its mineralisation is over 150 metres deep.
Success has led the firm that owns San Gregorio mine to invest about USD 2 million a year in new explorations, and it is quite likely that the useful life of the project will be extended, depending on the outcome of these explorations.
This example of gold and silver production has reaffirmed Uruguay's potential in this type of mining resources and it has boosted exploration, bringing about the rise in the number of applications for gold prospection and exploration licences that was mentioned earlier.
Research into diamond exploration is developing systematically and numerous licences have been granted by DINAMIGE since 1994. Geological theories based on the study of Archaean basement rocks suggest that the characteristics of the Uruguayan geology indicate that primary diamond deposits might exist here, and this is leading to investments in exploration.
This investment process includes several primary achievements attained by Kentilcor in exploration which deserve to be highlighted. Kentilcor is a firm owned by Southern Era, a Canadian company that is executing several diamond production projects in different parts of the world.
Based on an airborne geophysical reconnaissance programme and the gathering of geological samples, this firm has discovered virgin kimberlite fields in Uruguay in the area it has called _Provincia Kimberl¡tica del Rio Arapey_, which is associated with significant quantities of alluvial gold mineralisations. This company's initial find of 12 kimberlites has been encouraging and has justified new investments in exploration.
4. Ornamental Rocks
On the basis of current knowledge it is possible to affirm that Uruguay is on the way to develop a significant ornamental rock industry, mainly in the field of granites, in which it has already achieved wide international renown. 50% of its territory is apt to host granite deposits, especially in the southern portion of the country where existing facilities and its proximity to the largest port provide additional advantages.
Granite production has grown gradually, not only in order to meet domestic demand but also because of increasing exports. _Black granites_ (microgabro) rank first in these exports, both in the absolute black granite and in the Oriental black granite categories, highly valued for their brightness and the purity of their colour, and whose quality is comparable to that of the South African black granites.
A broad range of granites of other colours is also produced; among which grey, pink, red and iridiscent coarse black are the most important. In 1997 the total output of granite showed a strong growth and reached a volume of almost 14,000 tons., double the 1996 production.
The main markets are Argentina, Japan, Brazil, Chile, Colombia, Mexico, U.S.A. and Italy.
Although exports of rough granite continue to account for a significant portion of the total, lately the export of processed granites has experienced a rise, as a result of important investments in processing plants with European state-of-the-art technology.
Investments aimed at achieving a higher degree of processing could produce a substantial rise in the value of the output, since Uruguay has large reserves of these rocks. The potential reserves of black granite are very big, and grey and coloured granites are far vaster.
4.2 Marble, flagstone and porphyry
Although at present production is not large, there are marble deposits in Uruguay for use in the domestic market. Commercial marbles are primarily actual marbles, but dolomitic marbles are also exploited. Most of them are coloured and streaked, coarse grained and soft.
Because of the characteristics of the deposits, with rare exceptions, the quarries produce small blocks. Consequently their future commercial development must be linked to the capacity to enhance their value for the foreign market, by means of a process that matches the physical possibilities of the material.
Flagstones have started to experience an incipient exporting trend, and what can be highlighted is the manner in which it is made, as tiles or sheets with polished bright surfaces and extremely attractive colour tones.
Porphyry deposits have recently acquired commercial value for ornamental use, and they are a new exploitation area on which detailed technical studies by local and foreign companies are focused. A deposit of sufficiently large purple coloured compact blocks, that enjoy a high commercial demand since this colour can only be found in this part of the continent, will soon be exploited.
5. Semi-precious Stones
Uruguay, just like Brazil, has agate and amethyst deposits in geodes contained in Cretaceous lavas in the north part of the country. Semi-precious stone production has enjoyed variable growth, linked to foreign demand fluctuations.
In 1997, the agate output was 49 tons, whereas the production of amethysts reached 74 tons. These figures are far below the productive potential of the industry, since in previous years the volumes registered were 160 and 250 tons, respectively.
Uruguayan amethysts stand out internationally for their deep violet colour, that clearly distinguishes them from the other deposits of the world. They are also renowned for the frequency of their carvable peaks, valuable for fine jewellery. This fact has generated an important exporting trend mainly addressed to the European markets and to those of Australia, New Zealand, Japan, China, South Korea, Hong Kong, Taiwan, U.S.A., Israel and South Africa.
Since exports mainly involve stones that are scarcely processed, the processing workshops and stone-cutting areas have received technical assistance enabling them to achieve a greater level of development. Workshops for the cutting of fine amethyst benefit from technological support provided by the European Union.
6. Construction Materials
The production of minerals for the construction industry has been economically significant in Uruguay, both with regard to their sales in the domestic market and to exports. Prospects of intensifying exports within MERCOSUR are highly encouraging, basically as suppliers to the Buenos Aires, La Plata and Entre R¡os markets in Argentina, because of the high availability of the resource and of the proximity to these consumption centres.
Among these materials, limestone for the manufacture of Portland cement is an item that enjoys vast possibilities for export growth. In 1997, Uruguayan output of limestone was 1.1 million tons, having grown 41% compared to the previous year.
|THE DEVELOPMENT OF LIMESTONE PRODUCTION (Tons)|
In view of this potential, in 1997 the Spanish consortium Cementos Mullins and Cementos Uniland (CUCPSA) has built the most modern plant in the region, at a cost of USD 60 million and with a 470,000 ton capacity. Additionally, there is ANCAP, the State-owned company, that is currently involved in a process aimed at entering into partnership with private capitals to enhance the output of its two cement producing facilities and quickly increase their export markets.
In the light of this outlook, Uruguay has resumed its exports to MERCOSUR with figures of up to 30,000 tons in 1995, 76,000 tons in 1996, 140,000 tons in 1997 and forecasts for 1998 predict 300,000 tons.
Uruguay is also an important producer of sand and broken stone, and these exports are growing, especially with Argentina as their destination.
The execution of large infrastructure projects such as the Colonia - Buenos Aires International Bridge, which will be 44 kms long and form the highway axis joining Buenos Aires and Sao Paulo across Uruguay, have rekindled the development expectations of this sector because of the great demand for these materials that the works themselves will generate.
7. Clays and Manufactured Products
Uruguay has deposits of two types of clay: kaolin and bentonite. Kaolin has led to the establishment of a strong industry producing ceramics for use in the manufacture of chinaware and bathroom appliances, especially for export to markets such as that of Argentina, Chile and the European Union.
Recently, an important deposit of bentonite in the Department of Cerro Largo has been the subject of a call for bids and a contract has already been awarded. The project foresees the establishment of an industrial plant, aimed basically at the Brazilian market.
Likewise, significant limestone deposits have enabled the development of the red ceramics industry.
ZDROJ: Velvyslanectví Uruguaye v Kanadě