MEXICO CITY (Reuters) - Investment in Mexico’s mining industry is expected to rise this year due in large part to a global recovery in metal prices after four years of declines, according to projections from the sector.
Mexico’s mining chamber predicts mining investments will total $5 billion by the end of the year, a 33-percent increase from 2016, Sergio Almazan, the group’s director, said in a telephone interview. Nearly half of the funds would come from overseas.
Last year, foreign direct investment in the sector, which represents 3.9 percent of the gross domestic product, amounted to $1.3 billion, according to data from the Mexican economy ministry.
Investments in the industry reached a height of $8 billion in 2012, but began to fall due to declines in international metal prices and, later, new taxes on the sector, which took effect in 2014.
“Fortunately, the prices are beginning to respond in a positive way,” said Almazan. “There are many projects that are in development from years ago due to the good cycle that our country experienced.”
So far in 2017, the price of copper has risen more than 23 percent, the price of gold has climbed 15 percent, and the price of silver has increased by 11 percent.
Almazan said that the industry is hoping that authorities will revise the tax rates that, in his view, have hurt the competitiveness of the Mexican industry relative to its peers in the region.
“We have converted into one of the most expensive countries to invest in,” he said.
Reporting by Noe Torres; Writing by Julia Love; Editing by Alistair Bell