Shares in both Mexican miners and those with operations in the country were severely hit this week as leftist President-elect Andres Manuel Lopez Obrador is likely to approve a proposed legislation that could restrict mining activity in the country.
Early this week, parliament members belonging to the National Regeneration Movement (MORENA) party tabled bills to include environmental and indigenous community protections in the proposed revision of Mexico’s mining code.
MORENA and its allies hold majorities in both houses of Congress.
The new set of suggested rules already included tax hikes, but this week’s events increased investors worries over the future of existing operations, especially if conditions were breached.
"We believe Mexican mining equities will decouple from fundamentals for the foreseeable future given the heightened uncertainty around the regulatory framework for mining operations in the country," Morgan Stanley said in a note to clients quoted by local paper Expansión.
Local miners Industrias Penoles and Grupo Mexico fell for a third straight day on Thursday in the local exchange, while Mexico-focused Fresnillo (LON:FRES) closed almost 10% lower yesterday on the news and it was falling again on Friday (-2.87% to 779.4p by 1:20 pm local time).
Other possible changes to the mining code include allowing the Ministry of Economy to name certain zones as not viable for mining, and revoke permits and existing concessions deemed to have a negative social impact.
The incoming government is also mulling empowering certain Mexican agencies with overseeing the social and environmental impact of mining activities.
The post Mexican miners already hit by proposed changes to code appeared first on MINING.com.
from MINING.com https://ift.tt/2Bsae6a
Aucun commentaire:
Enregistrer un commentaire