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.
Mining investment in Mexico is set to climb by about 42% in 2021 to reach more than $5 billion, after tumbling last year during a pandemic-related economic slowdown, the head of the country’s mining chamber forecast on Monday.
The sector is expected to make significant gains following investment of only $3.53 billion last year, even though the government ultimately designated mining an essential activity, Camimex President Fernando Alanis told reporters on a webcast news conference.
Mexico’s mining sector represents about 2.3% of the country’s overall economic activity.
“We think it could be a good year for investment,” said Alanis, who until earlier this year was the long-time chief executive of Industrias Peñoles, a top precious metals miner.
Mexico is the world’s biggest silver producer, accounting for nearly a quarter of global output, as well as a top ten producer of both gold and copper.
The country is also home to large potential reserves of lithium, used in a wide range of rechargeable batteries and forecast to experience a demand surge later this decade.
Alanis added he expects exploration investment to jump 14% this year to total around $385 million, despite the policy of President Andres Manuel Lopez Obrador to allow no new mining concessions.
While Mexican mining output dipped 1.3% last year in volume terms, the value of the production rose by nearly a quarter to reach some $13 billion thanks to surging metals prices.
(By Noe Torres; Editing by David Alire Garcia and Richard Pullin)
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