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.
For the first time in years, Mexico will start charging mining companies already operating or planning to start up in the country with royalties aimed at benefiting local communities, reports local newspaper Vanguardia (in Spanish).
The bill, outlined in President Enrique Peña Nieto’s “Pact for Mexico” when elected last year, is expected to reach the Congress in the first half of this year and, according to the newspaper, it is known to include reforms to concessions and mining rights payments. However, it is not clear whether the proposed law will also include requests for royalties.
According to the Pact for Mexico’s website, the new mining regulation will be ready by the second half of the year, with full implementation expected by mid 2014.
The ruling also calls for agreements by mining companies to “respect the traditions and the social cohesion” of local communities, and will ban the use of vertical shafts in coal mining “to avoid further tragedies.”
Currently there are no taxes or levies imposed specifically on the mining industry in Mexico. Companies only pay standard corporate income tax rates, which are determined by the federal government.
Economy secretary, Ildefonso Guajardo Villarreal, told Vanguardia that directing money from mines to communities is key to avoiding conflicts and that, in that respects, the law will benefit present and future operations in the country.
(Image Copyright: holbox, Shutterstock)
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