Mexico's mining industry has lost some luster. Mexico's mining industry has lost some luster.

Public policy, security take shine off mining

Mexico's attraction as a destination for mining investment has dropped 26 places in 2 years

An annual index that ranks 104 metal-producing countries for their attractiveness to investors put Mexico in 50th place last year, down from 37th the year before and 24th in 2014.

The index is a product of the Canadian think tank the Fraser Institute, which said Mexico’s new ranking is a reflection of a negative perception towards public policy regarding mining and insecurity.

With respect to the first theme, Mexico dropped three points to 53rd, while in another measure that looks at best practices Mexico went from 12th place to 43rd.

But a measurement of insecurity put Mexico among the 10 most dangerous countries, occupying ninth place in that ranking, moving up from 15th a year ago.

The Mexico Chamber of Mines, or Camimex, said new royalties introduced by the government with tax reforms in 2014 are one obstacle to investment, while the elimination of some tax deductions and new exploration costs are others.

But the government is optimistic, nonetheless.

Mario Alfonso Cantú, Undersecretary of Mining at the Economy Secretariat, told a recent forum that Mexico is in a unique strategic position to capitalize on investment in the sector.

He said investment in the industry totaled US $4.7 billion last year, of which $946 million was for new projects. The total was up 1.5% over 2015 and was the first increase in four years.

Mining investment declined 18% in 2013, 24.8% in 2015 and 6.4% in 2015.

Investment is expected to be slightly higher this year, at $4.8 billion.

Source: El Financiero (sp)

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