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.
Newmont Goldcorp Corp (NYSE: NEM) (TSX: NGT) said Monday it will temporarily halt operations at its Peñasquito gold mine in Mexico due to an illegal blockade by a trucking contractor and some members of the Cedros community. Access to the site has been blocked since March 27.
The world’s largest gold producer by market value, output and reserves said it remained committed to “good-faith dialogue” with the roadblock’s leaders. It also noted it was working with Mexican authorities to resolve the situation in “a safe, fair and timely manner.”
The blockade began on March 27 and the company has been working with Mexican authorities to resolve the issue
A comprehensive contingency plan is in place to resume operations once the illegal barrier is lifted, the miner said.
The Peñasquito mine produced 272,000 ounces of gold in 2018. The mine is part of the portfolio of Goldcorp, whose acquisition Newmont completed this month to become the world’s biggest gold producer. It accounts for about 17% of the combined company’s net asset value, according to Scotiabank.
In the last three years, the operation has been the target of protests of landowners, truck drivers and residents of nearby towns. They mostly demand jobs, compensation for alleged environmental damages and clean water for their communities.
The mine’s previous owner, Goldcorp, recently said that objections to the mine decreased by almost 66% last year due to improved relations with locals, including building a rural health centre in the town of Cedros and launching an economic development program for small businesses.
Comments
Jacques Meoff
If the sustainability team actually did what they PROMISED to the locals, things would be running much more smoothly. The much touted local clinic was promised to have been finished years ago, and yet it was only recently commissioned with much fanfare and back patting (mainly to each other).
The team is a joke and riddled with corruption but they each cover their colleagues misdemeanours. Each day the blockade is in force causes hundreds of thousands, of not millions in losses but they still prevaricate and quibble over past promises. Good job Peter!