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.
The deputy secretary of work at the national level for the Confederation of Mexican Workers, Javier Villarreal, asked the federal government to include mining in its list of ‘essential services’ so that operations can resume in May.
Most economic activities were halted in Mexico in late March due to the covid-19 pandemic, with the health and energy sectors, the oil industry, and public services such as water supply, waste management and public safety being the exception, together with steel, glass and cement manufacturers.
As of Sunday, Mexico had 7,497 confirmed cases of covid-19 and had registered 650 deaths. Due to rising numbers, president Andrés Manuel López Obrador extended social distancing measures until May 30, 2020
However, according to Villarreal, mining provides the raw materials that allow other industries, considered essential, to operate. Thus, he believes the extraction and processing of minerals and metals should be allowed to go ahead.
The union leader said activities at mine sites and processing plants can be resumed taking heightened hygiene measures and banning people in high-risk groups, such as senior citizens or pregnant women, from going back to work.
Speaking to El Universal newspaper, Villarreal said that it is important to remember that mining operations tend to be very respectful of safety protocols and that these days, most are making sure that there is physical distancing between workers and that everyone is using personal protective equipment.
But Villarreal is not the first one to bring the topic to the forefront. In early April, industry leaders started pushing for an exclusion to the temporary halt of non-essential activities, arguing mining should be allowed to continue due to its importance to national supply chains and the wellbeing of host communities.
Mexico is the world’s largest silver producer, responsible for nearly 23% of the global supply. In 2019, the country produced 200 million ounces of silver, up from 196.6 million ounces in 2018. It also hosts 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.
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SERGIO ALEJANDRO
The mining operations are priorities.