Asia

Russian diamond producer Alrosa has started mining ore from the Botuobinskaya kimberlite pipe at its Nyurba Mining and Processing Division (Nyurba MPD) in the Republic of Sahka (Yakutia) in Russia’s...
More inAsia  

Africa

Allana Potash Corp. has announced positive results from an independent preliminary economic assessment (PEA) of production of sulphate of potash (SOP) at its Danakhil potash project in Ethiopia. The...
More inAfrica  

Latin America

Leading Developments

Rio Tinto shipped 72 million metric tons (mt) of iron ore during the first quarter, which was 9% more than the first quarter of 2014. Iron ore production for the quarter increased 12% year-on-year to...

US & Canada

Imperial Metals began commissioning the mill and concentrator at its new Red Chris copper mine in northwest British Columbia in early February and trucked its first shipments of copper concentrate to...
More inUS & Canada  


Mining investment in Mexico hangs in the balance following a proposed 7.5% mining royalty increase, with the government arguing that rising running costs, higher taxes and lowering metal prices are hindering the country’s overall investment climate. Mexico is the No. 1 silver producer with Latin America’s second-biggest economy; mining is its fourth-largest industry.

Part of President Enrique Pena Nieto's plan to bolster Mexico's overall tax haul, the increase is part of a broader initiative aimed at widening the tax base for states and smaller municipalities where mines operate. The mandates a 7.5% earnings royalty before interest, taxes, depreciation and amortization (EBITDA).

In Q2, Congress approved new royalty legislation, which was initially pending a Senate vote by 2013’s end. Policymakers, however, have since bundled it into Nieto's reform package, in which an 8% royalty could also be applied to gold, silver and platinum miners.

The planned 5% royalty payment had already been greeted with discontent. Chief executive of Riverside Resources Inc. John-Mark Staude, for instance, said he has removed 45% of his operations from Mexico since the royalty debate surfaced in 2011."I know I'm moving: we've moved into Canada; we're still in Mexico, but we've moved into the United States," Staude told Reuters of his Canadian firm.

"I'm not saying it's a death knell, but at this time, the investors are not willing to carry that risk;" Staude said, adding that he would remove 50% of his remaining assets from the country should the legislation prevail.

Keith Neumeyer, CEO of Canadian silver miner First Majestic, also slammed the proposal. "If the law is passed, it will majorly impact investment in Mexico," he also told Reuters.

Camimex, Mexico's mining chamber, which argued against the first royalty scheme, meanwhile, said it will continue analyzing the proposal. Government officials, for their part, said Mexico has been too generous to mining companies. "This will not affect investment decisions and is much more favorable than those adopted in other countries where they simply tax revenues," the lawmakers said.

Miners pledged to lobby the government on behalf of universal interests, according to Armando Ortega, of Canada’s New Gold Inc. "We're going to try to tell them that the timing, the scale, the mechanism and the methodology behind this scheme, will only endanger, not boost, the public purse," said Ortega, the vice president for the company’s Latin America division. "If the low price cycle keeps falling many companies are going to suspend operations," he added.

Let's stay in touch!

All of the latest mining news and our digital edition sent to your inbox once a week.

We'll never share your email address, and you can opt out at any time, we promise.

Digital Edition

Precious Metals ($/oz)

[Most Recent Quotes from www.kitco.com]