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Mining Industry Warns of Economic Losses if Shutdowns Remain

By MBN Staff | Tue, 05/05/2020 - 16:24

The temporary shutdown of mining activities due to the COVID-19 sanitary measures has affected the industry’s cash flow. While in Mexico mining remains a non-essential activity, the US Department of Homeland Security and Canada’s National Strategy for Critical Infrastructure defined this as an essential business activity.

The President of the Mexican Mining Chamber (CAMIMEX) Fernando Alanís reported that the forecast for 2020 was to have investments close to US$4 billion, which will be seriously affected by the pandemic. If the shutdown extends over the next two months, the sector will stop contributing approximately MX$14.6 billion (US$608.3 million) to the state and there will also be an impact on “foreign currency generation” in the country, explained Alanís. In addition, he pointed out that the Tax Administration Service owes the mining sector tax returns totaling billions of dollars.

Currently, the mining industry is struggling to be considered by government officials an essential economic activity and talks with locals and the government to get the industry back on its feet are still ongoing. To get the message across, campaigns such as #MineriaEsencial have also been created. In mid-April, First Majestic, Mexico's third-largest silver producer, asked the government to consider silver mining an essential activity claiming silver is essential and critical to the medical industry given its antibacterial properties, which are proven to reduce the spread of viruses.

According to data from the Ministry of Health, there are 379 municipalities free of COVID-19 and 70 percent of the activities of the mining industry are located in these municipalities, said Alanís. "We are sure that if we can start activities in those municipalities following safety protocols we could reactivate the sector, generating development and well-being for those communities," he explained.

Close to 250 employees of Excellon Resources’ la Platosa mine in Durango state, took the Gómez Palacio-Jiménez highway to protest the company's decision to carry out a partial six month closure without pay, according to employees. The National Leader of the National Front Metallurgical Mining Union Carlos Pavón said that a partial shutdown would imply a severe blow to this area since the 250 workers are from the Bermejillo community. The shutdown would also paralyze the local economy because workers consume food, cement and tools, among other supplies.

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