Asia

Eldorado Lowers Guidance on Kişladağ Citing lower recoveries, Eldorado Gold has revised its 2017 guidance for the Kişladağ gold mine in Turkey to 170,000 ounces (oz) to 180,000 oz at cash costs of...
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Africa

Randgold Prepares to Complete Kibali Underground Mine in the DRC The Kibali gold mine remains on track to achieve its production target of 610,000 ounces (oz) this year as its underground...
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Latin America

Escondida’s Copper Production Ramps Up Minera Escondida has finally shaken off the effects of a labor strike that impacted production at the mine for 44 days between February and March. The mining...
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Leading Developments

Polyus has poured the first doré gold at its Natalka mine, a major greenfield project in Russia’s Far East, during the ongoing hot commissioning process at the mill. The full processing facility is...

US & Canada

Rainy River Pours First Gold New Gold has completed its first gold pour at its Rainy River mine, and the company’s commissioning plans remain on schedule. The first pour yielded approximately 500...
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Europe

Boliden: Mine Production Attains Record Level Boliden’s first quarter report was characterized by strong levels of mined production and stable production at the copper smelters. “The metal prices...
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Australia & Oceania


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.

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