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.
Following the approval of several mining-related permits that had been stalled, in some cases for years, Peru’s coffers received $600,000, the government announced.
According to a statement by the Specialized Investment Monitoring Team (EESI), an agency of the Ministry of Economy and Finance, Teck Resources (TSX: TECK.A and TECK.B, NYSE: TECK) tops the list of approvals after receiving a rubber stamp on the detailed environmental impact assessment and the confirmation of its surface rights for its Zafranal copper project located in the Arequipa Region. This will allow the company to start the construction phase.
On the other hand, Chinalco’s Toromocho copper mine obtained approval for the modification of its beneficiation plant which is part of the mine’s phase II expansion project. The initiative will allow production of the red metal to rise to 170,000 tonnes from the current 141,000 tonnes.
Similarly, Hochschild Mining’s (LON: HOC) modified environmental impact assessment for its flagship Inmaculada gold-silver mine in southern Peru was greenlighted. This approval will allow the company to expand the mine’s life for another 20 years and create over 750 new jobs.
According to the Ministry of Economy and Finance, other environmental management instruments and authorizations for mining projects were ratified, such as those submitted for Newmont’s Yanacocha gold project, MMG’s Las Bambas copper mine, Profundización Retamas, Yumpag, Pucamarca, and others.
“The relaunching of the new EESI strategy and the articulated effort of the competent entities have made it possible to make the aforementioned mining projects viable and regain the confidence of big companies, guaranteeing an adequate investment climate that is predictable and provides legal certainty,” the ministry’s statement reads.
The government department also noted that, in addition to the prior, mining companies have already announced or ratified $10.5 billion worth of projects. Among such initiatives are Rio Tinto and First Quantum Minerals’ $5-billion La Granja project, one of the largest undeveloped copper deposits in the world; Glencore, BHP Group, Teck Resources and Mitsubishi’s $2-billion extension project for the Antamina copper mine; the $1.5 billion Coroccohuayco project, also by Glencore; the $1.4-billio Zafranal project; the almost $600-million Falchani project, owned by American Lithium Corp., among others.
