Mexico mining tax approved, but hits political roadblock
Mexico’s senate approved by 73 votes to 50 the broad outline of a package of tax reforms, which included a debated 7.5% charge on resource companies, and as much as 8% for gold, silver and platinum.
The lawmakers, however, decided to set aside scores of divisive sections to be processed later.
Members of the National Action Party (PAN), the main opposition party, expressed their discontent with the decision by abandoning the session as the Senate began to work through the reservations, reports CNN Mexico.
They claim the taxes will see investment in the country’s mining sector drop off dramatically, with major companies such as Canada’s Goldcorp (TSX: G), (NYSE: GG) and Grupo Mexico warning they may need to take their money somewhere else.
Despite the senate tensions, the tax package was expected to be finalized later Wednesday or at some point today. Following senate approval the reforms only need to be enacted by President Enrique Peña Nieto to become a law.
“Mexico is completely pricing itself out of the market,” says Rosalind Wilson, head of the Canadian Chamber of Commerce’s mining task-force in Mexico. In an interview with The Economist, she noted that last year the country took 53% of the $1.9 billion raised on the TSX and its junior twin to finance mining in Latin America. In the first eight months of this year, the figure had fallen to 17%.
About 334,000 people work in Mexico’s mining sector, and more than 2 million are indirectly employed by it, which makes it the country’s fourth largest industry in dollar income, only behind cars, oil and electronics.