Mexico’s Newmont optimistic about talks on mining royalties hike

By Raul Cortes

MEXICO CITY (Reuters) – Newmont’s Mexican division mentioned on Wednesday it sees an “openness for dialogue” from the Mexican authorities, amid the proposed enhance in mining royalties, which may doubtlessly hinder billions of {dollars} in investments.

WHY IT’S IMPORTANT

The proposed enhance in mining royalties may block greater than $6.9 billion in investments over the following two years, in keeping with the nation’s mining chamber, including to the challenges impacting the sector reminiscent of earlier administrative choices and potential authorized reforms.

Newmont, a world chief in gold mining, operates the massive Penasquito open-pit gold mine in Mexico which produces gold, silver, zinc and lead, and processes a median of 110,000 metric tonnes of contemporary ore day by day.

KEY QUOTES

“There’s a number of curiosity from the businesses, a number of dedication to proceed investing in Mexico,” Ana Lopez, supervisor of Newmont’s unit in Mexico mentioned, though she famous that “the very best situations when it comes to certainty, alternative and collaboration are additionally obligatory for us to proceed to take action.”

“This and any norm that’s accredited and applies to us, what we’ve got to do is adjust to it,” she mentioned, referring to the controversial royalty enhance proposal.

Lopez additionally welcomed the stance taken by Mexican President Claudia Sheinbaum final week, proposing a evaluate of a authorized reform which sought to ban open-pit mining, a problem that has additionally generated concern within the business.

CONTEXT

The Mexican authorities’s proposal goals at growing royalties from the business, arguing that metals costs have grown steadily in recent times.

The mining sector was already impacted underneath earlier President Andres Manuel Lopez Obrador, who refused to grant new mining concessions, and it faces new challenges with the administration of his successor, Sheinbaum, as authorized reforms may hinder mining operations in Latin America’s second largest economic system, after Brazil.