Thursday, June 8, 2017
Investment in Mexico's mining sector slumped in 2016, partly due to lower exploration spending.
Spending totaled US$3.751mn, according to new data from industry chamber Camimex, down from US$4.63mn in 2015, and about US$1bn lower than the US$4.70bn provisional figure provided by the chamber in February.
Investment was less than half the US$8.043bn peak in 2012 following four consecutive years of declines. The 2016 figure is the lowest since the US$3.32bn seen in 2010.
No forecast was given for investment in 2017. The chamber previously said it expects the figure to rise to US$4.80bn this year.
EXPLORATION
Exploration spending was also down to US$401mn, a decline of US$90.0mn from 2015 and US$764mn lower than in 2012.
Rules preventing miners from fully deducting preoperative exploration costs against income tax contributed to the drop, Camimex president Daniel Chávez said.
Under changes that went into force in 2014, mining companies can only deduct exploration spending against income tax over 10 years at a 10% rate, rather than 100% previously.
"The situation is worrying because exploration is the most important link in the mining production chain, and if conditions do not allow an increase in exploration spending, mineral resources will be gradually exhausted, operations will be reduced and with that jobs and the sector's contribution to public finances," Camimex said.
Mexico is the world's top silver mining country and a top 10 producer of gold, copper, lead, zinc and molybdenum.
Original Article: http://www.bnamericas.com/news/mining/mexico-mining-investment-slumps-to-six-year-low
