Mexico is a silver miner’s paradise, with enviable silver mineralization down its central belt, which is why it consistently ranks among the top silver producers globally. For Mexico to maintain its top spot, it is under more pressure to guarantee jurisdictional stability
In an exclusive preview of 2018’s edition, Mexico Mining Review asked mining leaders and governmental authorities about their main concerns regarding Mexico’s silver production and the strategies they are using to face these obstacles.
WHAT DOES MEXICO NEED TO ENSURE ITS POSITION AS THE WORLD’S LEADING SILVER PRODUCER?
The Ministry of Economy has implemented several actions to ease doing business in Mexico. It has reduced regulations to facilitate investment in sectors where FDI was previously restricted, such as telecommunications and energy. It has increased accessibility and transparency of the Public Registry of Commerce and Property. With Congress’ support, it has created a new corporate figure called Simplified Joint Stock Company, which allows an individual to open a business online, at no cost, and at any time when its annual income remains below MX$5 million. Finally, it has encouraged the use of electronic platforms to ease processes concerning FDI registry, allowing access to the required national standardization procedures and applicable standards or technical regulations.
The attractiveness of future investment in Mexico’s mining sector should be the industry’s number one priority. There were some problems with the introduction of the royalty tax a few years ago that certainly impacted negatively on mining investment, admittedly at a time of falling metal prices. Now, with the latest introduction of an Ecological Tax imposed by the state of Zacatecas it sends a very mixed message to investors in the Mexico mining industry. Zacatecas is a traditional mining state within Mexico and there was very little notice and no prior discussion regarding the implementation of the tax, and the reasons for its imposition remain unclear.
Mining accounts for just over 4 percent of GDP, contributes to foreign collaboration, generates a significant number of direct and indirect jobs and brings economic prosperity to remote areas. Mining in Mexico has been and is crucial for the development of our country. Mexico is a world leader in silver production and is among the top 10 producers of 19 minerals. For this reason, in recent years, legislative analysis on the subject of mining in Mexico has generated intense debates and as a result, the Mining Commission was created. As for the short and long-term goals, we are in the penultimate year of the administration so we are making plans to standardize the commission, which will allow us to make more long-term plans. Another objective is to strengthen the links between state authorities, investors and executives in the sector in order to boost mining, standardize criteria and seek to prioritize the mining sector.
For companies in the silver industry, there is no more favorable location in Latin America. Mexico is more modernized than other jurisdictions like Peru and one of the top five mining jurisdictions in the world. However, it is not perfect. Sometimes it can be challenging to do business for companies other than the big Mexican operators, and issues such as land ownership can become complicated and drawn-out. We have a number of projects that we would like to develop but we cannot get a ruling on land ownership. But this is a very minor criticism. We have not had any security issues, and we have always had strong support from the local authorities. Americas Silver Corporation is happy with Mexico as a jurisdiction and wants to grow its business in the area.
This is an exclusive preview of the 2018 edition of Mexico Mining Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy Mexico Mining Review.