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.
Fortuna Silver Mines’ stock fell 11% on Thursday after a decision to re-assess the extension of the San Jose mine Environmental Impact Authorization.
The company reported that its Mexican subsidiary, Compania Minera Cuzcatlan, has received written notice of a resolution issued by the Secretaria de Medio Ambiente y Recursos Naturales (SEMARNAT), re-assessing the 12-year extension to the environmental impact authorization (EIA) for the mine, located in Oaxaca.
According to the company, SEMARNAT has issued two multi-year environmental authorizations over the last four years for the mine and tailings facility.
After the grant of the EIA extension on December 2021, SEMARNAT suggested that it had made a typographical error in the EIA extension and that the correct term was two years. As a result, Minera Cuzcatlan initiated legal proceedings to challenge and revoke the alleged typographical error.
On November 2022, Fortuna Silver announced that the Mexican Federal Administrative Court had issued a judgment in favour of the company and re-confirmed the term of the EIA extension for San Jose for 12 years.
On Monday, however, Minera Cuzcatlan received another resolution from SEMARNAT, which annuls the EIA extension and requires SEMARNAT to re-assess its decision to extend the EIA by conducting a review.
“It is incomprehensible that we find ourselves again having to contest a controversial resolution issued by SEMARNAT. This specific authorization, one of the many under which San Jose operates, was confirmed by the Federal Court last November, with a ruling in our favor against SEMARNAT,” said Jorge A. Ganoza, Fortuna Silver CEO.
Minera Cuzcatlan said it would initiate legal proceedings against SEMARNAT to contest and revoke the annulment of the EIA.
The San Jose Mine was commissioned in July 2011 and began commercial production in September 2011 at 1,000 tonnes per day. In 2021, the mine produced 6.43 million ounces of silver and 39,406 ounces of gold.
