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.
About 80% of Mexico’s mining sector has restarted as the country continues to ease restrictions on miners amid the coronavirus pandemic, Francisco Quiroga, Mexico’s undersecretary of mines with the country’s Ministry of Economy, said in an interview with S&P Global Market Intelligence.
The country shut down the mining sector in late March in response to covid-19 and started to allow restarts in mid-May after it declared mining an essential service.
Operations have started to ramp up at Newmont’s Penasquito gold mine and Alamos Gold’s Mulatos gold mine.
Mexico’s mining sector shut down in late March in response to covid-19 and started to allow restarts in mid-May after it declared the mining an essential service
On Monday, Excellon Resources (TSX:EXN) announced the restart of its operations in the country, including Platosa, Mexico’s highest-grade silver mine.
Avino Silver & Gold (TSX: ASM, NYSE:ASM) also reported on Monday it is starting a phased ramp-up of operational activities at its Avino mine near Durango, Mexico.
Exploration and development company Bacanora Lithium (LON:BCN) announced it expects to reopen the Hermosillo pilot plant at its flagship Sonora lithium project this month.
Endeavour Silver (TSX: EDR) (NYSE: EXK) has also resumed operations at its three underground silver-gold mines in Mexico. Meanwhile, Fortuna Silver Mines (NYSE: FSM) (TSX: FVI) has resumed operations at its San José mine, in Mexico’s southern state of Oaxaca.
Mexico is responsible for nearly 23% of world production of silver, churning out more than 200 million ounces last year, up from 196.6 million ounces in 2018.
The country also has major copper and zinc mines, operated by Grupo Mexico and Southern Copper, and produces a significant amount of gold, making the mining sector responsible for about 4% of the nation’s gross domestic product.
“Sanitary authorities have repeatedly called the mining sector the best equipped and best prepared to go back to operations,” Quiroga said in the S&P Global Market Intelligence interview.
Quiroga said Mexico’s Department of Labor would have coronavirus-specific health inspections by officials who could visit mine sites without announcing their arrival first.
“They will not have a punitive focus,” Quiroga said. “If there’s something wrong, we will invite companies to fix it.”
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