Asia

Freeport-McMoRan Updates Status of Indonesia Operations Following more than five years of discussions, PT Freeport Indonesia’s (PT-FI) and the government have failed to reach an agreement on...
More inAsia  

Africa

B2Gold Targeting October Production Start at Fekola B2Gold reported that construction of its Fekola gold mine in southwest Mali is ahead of schedule and now on target for an October production...
More inAfrica  

Latin America

Guyana Goldfields Expanding its Aurora Gold Mine in Guyana Guyana Gold is initiating work to increase plant processing capacity at its Aurora gold mine in northern Guyana from 5,600 metric tons per...
More inLatin America  

Leading Developments

Cliffs Natural Resources reported U.S. iron ore (USIO) pellet sales for the first quarter of 2017 of 3.1 million long tons, a 63% increase compared to the first quarter of 2016. “During the first...

US & Canada

Trevali Buying New Mining Fleet for its Caribou Mine Trevali Mining is transitioning to an owner-operation at its underground Caribou zinc mine in northeastern New Brunswick, Canada, and is...
More inUS & Canada  

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.

Resource Center Whitepapers, Videos, Case Studies

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.