agency Moody’s warned this Monday of risks to the industry booty V Mexico for the reforms promoted President Andrés Manuel López Obrador limit concessions.
“If the changes are approved as proposed, they will negatively affect the creditworthiness of the mining sector, which will increase the regulatory burden on producers and increase the risk of early termination of their current concessions”, released a report from Moody’s Investors Service.
The report mentioned a reform that López Obrador proposed on 28 March to the government. mining lawwhich will now grant mining concessions only on the basis of open tenders and after prior consultation with original cities, in addition to reducing its duration from the current 50 years to 15, with the possibility of only one extension.
In addition, Moody’s warned of yet another reform that would allow the government to unilaterally revoke concessions or permits in the mining industry and any sector on the sole grounds that they affect the “public interest”.
“This is especially negative for any future investment to take advantage of network relocation trends. (shoring)”, says in the report.
Moody’s hopes the government will discuss reforms before they are approved as mining is at 2.5% gross domestic product (GDP).
He also mentioned that Mexico is the world’s largest producer silver, second of fluorite and one of the top 10 zinc, gold and copper.
The report added that mining generated about $3.1 billion in tax credits in 2021, with companies investing a total of $5 billion in 2022.
“The proposed terms could prevent future mining companies from investing in Mexico and looking the other way. We hope that mining companies, whose activities make a significant contribution to the Mexican economy, will discuss proposals with the government,” Moody’s said in a statement.
Under the government of López Obrador, the area granted to mining companies decreased from 10.64% to 8.59% of the country’s territory, which implies about 24,000 concessions, according to Ministry of Environment and Natural Resources (Semarnat).
(EFE)
Source: Aristegui Noticias
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
