Mining projects shelved in Mexico up 40%, $8bn at risk
A total of 69 mining projects have been suspended so far this year in Mexico, 40% more than a year ago, due to falling commodity prices and increased local opposition.
Among the suspended projects, there are the Pericones and Setago projects, by Canadian Kimber Resources that halted explorations despite obtaining results that demonstrate importance presence of gold and silver veins.
Another suspended project is Caballo Blanco, Goldgroup's (TSX:GGA) 100%-owned advanced stage flagship gold project, with an estimated investment of $400 million.
According to Sergio Almazan Esqueda, CEO of the Mining Chamber of Mexico (Camimex), the plans that remain strong are the extension of Grupo Mexico’s Buenavista mine, with an investment of $1.4 billion, as well as the group’s Angangeo project, which was allocated $131 million for the year.
Peñoles, the second largest Mexican mining company, has also said it will go ahead with its $203 million planned investment for Velardeña zinc mine, in Durango, in the country’s northwest.
Mexico, which ranks fifth globally in terms of mining investment and fourth in exploration spending, is one of the few countries left in the world that does not charge a royalty on mining production or profits. Instead, firms pay fees based on the number of hectares covered by mining concessions; they also pay 30% income tax.
Mining employs about 334,000 directly, with 2 million people employed indirectly, making the sector Mexico's fourth largest industry in dollar income, behind cars, oil and electronics.
(Image by Sam Antonio Photography)