Mexico Loses Competitiveness as a Mining JurisdictionBy MBN Staff | Thu, 09/17/2020 - 17:27
The Week in Mining highlights developments in Mexico’s mining industry, where loss of competitiveness has resulted in the lowest exploration investment in 14 years. Even so, certain companies are replenishing the project pipeline and expanding their existing resources. Metals are expected to continue on their bullish run for the remaining of 2020 and Rio Tinto’s Juukan Gorge catastrophe might result in an ESG sea of change for the mining industry.
This and more in your weekly mining roundup!
As the dust settles in Mexico’s mining sector following the Undersecretariat of Mining’s termination, one of the main concerns among industry players is whether vital communication channels will disappear. However, former undersecretary Quiroga is confident that his legacy will remain.
Mexico’s Mining Chamber (CAMIMEX) expects exploration investments in 2020 to decline to their worst level in 14 years, even before taking the COVID-19 pandemic into account, reported Reuters. Falling investor confidence is to blame.
BNamericas has identified at least eight acquisitions by Mexico-focused miners and explorers targeting assets outside the country – mainly in the US and Canada. While it is still early for equating these moves to an industry-trend away from Mexico, they do point to the country’s falling appeal as a mining jurisdiction.
Among these eight business deals is Argonaut Gold’s sale of its Ana Paula gold project in Guerrero for US$30 million to a combination between AP Mining and capital pool company Pinehurst Capital II. The proceeds will be used to finance Argonaut’s Magino project in Canada, informed Mining.com.
Southern Silver acquired Electrum Global Holdings’ 60 percent indirect working interest (for a total 100 percent interest) in the Cerro Las Minitas project in Durango.
Capstone Mining released an updated technical report for its Cozamin mine in Zacatecas that includes a sharp increase in reserves and a plan to increase copper production by 70 percent.
The 10 percent re-imposed tariff by the US on Canadian aluminum will be lifted. “The US has made its peace gesture conditional on how much metal flows over the border in the last four months of 2020. Too much and the tariffs come back,” reported Reuters.
Analysts at the Canadian Imperial Bank of Commerce upgraded their gold and silver forecasts for the rest of the year and into 2021. Analysts said the average gold price will be US$2,000/oz in 4Q20. The Canadian bank sees silver averaging US$25/oz in 3Q20 and US$28/oz in 4Q20.
Rio Tinto’s destruction of an invaluable aboriginal cultural site in Australia may be a watershed moment for the mining industry, wrote Andy Home for Reuters. “Mining companies such as Rio have now been given notice that shareholders expect a zero-failure operational model similar to those applied in industries such as nuclear.”