Mexico’s proposed higher mining royalties could block nearly $7bn in investments
The Mexican government proposed raising mining royalties under the argument that metal prices have risen in recent years.
Shares in Canadian miner Kinross Gold’s (TSX:G) (NYSE:KGC) were hit Monday by the company’s decision to temporarily halt operations at its Tasiast mine in Mauritania following the West African country order to expatriates whose work permits were invalid to stop working.
The stock was down 3.6% pre-market in New York and 4.2% in Toronto after Kinross, the world’s fifth largest gold producer, confirmed it had left only a handful of people at the site for basic equipment maintenance.
Kinross has left only a handful of people at the site for basic equipment maintenance.
The move comes barely a week after unionized workers ended an 18-day strike as the company agreed to begin talks on a collective pay agreement.
Nearly all the mine’s 1,041 permanent staff took part in the stoppage.
In March, Kinross approved a $300 million first-phase expansion to double Tasiast’s production and slash its production costs. In today’s statement, the Toronto-based company said it did not expect the work permits issue to affect development of the planned expansion.
It also said that discussions with the government of Mauritania are ongoing and that it was Kinross’ understanding that a number of other institutions and companies operating in the West African country were also experiencing similar work permit issues with the Ministry of Labour.
Tasiast produced 219,045 of gold equivalent ounces (6.2 tonnes) in 2015.
8 Comments
Michael Alyoshin
Looks like a perfect storm for Tasiast…Since Kinross took it over this project has experienced just every text book problem mining enterprise could potentially face…
Bill_Wall
At best this is a marginal project. Mauritania should be bending over backwards for Kinross…..but that’s Africa for you.
PaoloUSA
Hard to believe that Kinross cannot cope with the labor law requirements for work permits and has to halt the operation and at the same time, continue with the planned expansion. Mauritania has been quite flexible in the approach to mining companies.
ChristoA
Started work at the almost largest Gold company in the World more than two decades ago, and today those folks are way down on the top 10. One big reason: major (crippling) investments in overpriced, under producing (albeit VERY rich) deposits in Africa, without understanding what really drives or matters in Africa. The same has happened here. Us westeners tend to think that Africa needs our version of capitalism and economic and social growth. All we need to do is simply train and coach them to understand this.
In our eagerness to get going (combined with a good infusion of gold fever) we completely forget to ask them what they want to get out of the deal. When disaster strikes the boardrooms lit up with major strategic sessions in order to re-shuffle and re-organise and re-group, while still neglecting to really fully understand what it is that the locals are looking for.
And somwhere down the line the company(s) slowly decends down the share position placements, while the gold remains safely in the ground, still belonging to the country in question, who have enjoyed the frantic show and investments provided by their overeager foreign investors.
Wayne Waters
It is time for many of these Mining Companies working and SPENDING money in these Foreign Countries to come back to North America, where it is safe, and spend money on projects here.
Sidi Mohamed
Mauritania is safe as well. It’s a problem related to working permit, and we have no safety or security concerns.
Cheers
Mike Bjarkoy
I spent a year and a half working in Mauritania as part of the Kinross Mine set-up. I felt safer there than I do in England. The people are respectful, proud and honest. I have never felt threatened in my time in Mauritania.
Salam
it’s a perfect storm for Kinross Board, specially Rollinson…. a whorty way to leave a 10B+ hell