Resource Nationalism on the Rise in MexicoBy Paloma Duran | Thu, 08/19/2021 - 17:19
President López Obrador's nationalist agenda seeks greater control in the mining industry and has made Mexico the country that has increased its investment risks the most in Latin America. Moody’s research shows that the mining industry in Mexico will be severely affected by the ongoing drought. And Copper prices have declined during the beginning of this week after factory output and retail sales in China rose less than expected in July. . This and more in your weekly roundup!
Mexico stands out from all the Latin American countries that have sought greater control of mining and its resources, since its investment risks are the ones that have worsened the most in recent years. According to the Resource Nationalism Index, which classifies the level of risk that companies have when operating in countries where governments want to have greater control of industries and their profits, Mexico is the country that has increased its risk for investors the most. In 2018, the country ranked 101st and in 2021 it ranked third, primarily due to López Obrador's nationalist agenda.
Credit ratings agency, Moody's Investor Services has published the results of a research developed by their Investors Services affiliate, revealing that the mining industry, alongside the beverage industry, are expected to be the most affected by the ongoing drought recorded in Mexico. Moody’s said that despite the mining and beverage industries have well-developed water management plans, they will have to continually increase capital expenditures in order to procure access to water in their production process.
Almaden Minerals announced that it has adopted a Human Rights Policy to show its long-term commitment to its employees, consultants, suppliers, local communities and the governments of the states in which it operates. The company explained that the policy will be used as a tool to continually improve the company's social actions, in addition to protect and promote human rights throughout the mine life and after mine closure in projects such as Ixtaca in Puebla.
The Bolivar Mine which is property of Canada-based Sierra Metals located in Chihuahua is getting an upgrade aimed to include production of iron and ore concentrate. The company made the announcement following the results of an updated Preliminary Economic Assessment (PEA) carried out by Canadian company SRK Consulting Inc, still to be filed. The report includes several figures that breathe new life into the mine, considered the sixteenth most important amongst copper mines in the country, including important data like an estimated 14-year mine life given current numbers of existing mineral resources.
Copper prices have declined during the beginning of this week after factory output and retail sales in China rose less than expected in July. The new virus restrictions introduced at the end of the month to contain fresh outbreaks have had a negative effect on retail sales. In addition, China’s refined copper imports fell for the fourth straight month in July, adding to the sense of lost momentum. China’s January-to-July copper import volumes dropped by more than 10 percent compared with the first seven months of 2020. In addition, the biggest copper buyer in the world bought 3.219 million tons of unwrought copper and copper products from January to July, down 10.6 percent compared with the same period in 2020.