The Ministry of Economy has implemented several actions to ease doing business in Mexico. It has reduced regulations to facilitate investment in sectors where FDI was previously restricted, such as telecommunications and energy. It has increased accessibility and transparency of the Public Registry of Commerce and Property. With Congress’ support, it has created a new corporate figure called Simplified Joint Stock Company, which allows an individual to open a business online, at no cost, and at any time when its annual income remains below MX$5 million. Finally, it has encouraged the use of electronic platforms to ease processes concerning FDI registry, allowing access to the required national standardization procedures and applicable standards or technical regulations.

The first thing that the public sector needs to look at is reversing the change to the deductibility on exploration expenses. That is a simple modification that would spark further exploration activity in the country, which is of course the lifeblood of the industry. We also struggle with land right issues because of discrepancies between the mining and agrarian laws, so there needs to be greater clarity and consistency on that front. We are happy with the level of support we have received from the state governments in Durango and Chihuahua, but the federal government is a different story. For example, VAT refunds are processed at a painfully slow rate by the Mexican Tax Authority (SAT).

Mexico is a leader in silver mining and has been for many years and projects like Fresnillo’s Juanicipio are set to keep levels high in the next few years. Mexico, North America’s largest producer and accounting for 79 percent of the regional total, had lower output last year but was still the world’s largest producer. The nation reported a 3 percent or 5.8-million-ounce year-on-year contraction, compared to modest gains in the US and Canada, respectively higher by 0.3 million ounces (10 tons) and 0.8 million ounces (25 tons). The fall in Mexico, the first since 2003, brings an end to 12 years of uninterrupted growth which delivered a remarkable Compound Annual Growth Rate (CAGR) of 8 percent. That said, many analysts still believe that Mexico will continue to be the leading producing country.

The attractiveness of future investment in Mexico’s mining sector should be the industry’s number one priority. There were some problems with the introduction of the royalty tax a few years ago that certainly impacted negatively on mining investment, admittedly at a time of falling metal prices. Now, with the latest introduction of an Ecological Tax imposed by the state of Zacatecas it sends a very mixed message to investors in the Mexico mining industry. Zacatecas is a traditional mining state within Mexico and there was very little notice and no prior discussion regarding the implementation of the tax, and the reasons for its imposition remain unclear.

For companies in the silver industry, there is no more favorable location in Latin America. Mexico is more modernized than other jurisdictions like Peru and one of the top five mining jurisdictions in the world. However, it is not perfect. Sometimes it can be challenging to do business for companies other than the big Mexican operators, and issues such as land ownership can become complicated and drawnout. We have a number of projects that we would like to develop but we cannot get a ruling on land ownership. But this is a very minor criticism. We have not had any security issues, and we have always had strong support from the local authorities. Americas Silver Corporation is happy with Mexico as a jurisdiction and wants to grow its business in the area.

The biggest challenge is the lack of knowledge at an international level regarding Mexico’s mineral reserves. We have deep, well-established investment relationships with both the US and Canada and it is vital to keep fostering those relationships. But we need to do more business with other major global economies, with a specific focus on China and Australia. China is the largest consumer of commodities on the planet, while Australia is very similar to Canada in that its economy is geared toward support of the mining sector. We need to attract investment from both of these countries. We have started to build ties – there are already a number of Chinese companies working in the Mexican mining sector - and we are coming closer every year. It is our job, as a government banking institution, to promote the mining sector and ensure that everyone knows about the opportunities in Mexico.

Mining accounts for just over 4 percent of GDP, contributes to foreign collaboration, generates a significant number of direct and indirect jobs and brings economic prosperity to remote areas. Mining in Mexico has been and is crucial for the development of our country. Mexico is a world leader in silver production and is among the top 10 producers of 19 minerals. For this reason, in recent years, legislative analysis on the subject of mining in Mexico has generated intense debates and as a result, the Mining Commission was created. As for the short and long-term goals, we are in the penultimate year of the administration so we are making plans to standardize the commission, which will allow us to make more long-term plans. Another objective is to strengthen the links between state authorities, investors and executives in the sector in order to boost mining, standardize criteria and seek to prioritize the mining sector.