Lack of certainty holding back mining investment in Mexico

A lack of clarity over the plans of Mexico’s government is holding back investment in the country’s mining industry, according to a company chief.

Joseph Délano, director of Délano Schmidt & Kranz, a division of German technology group Schmidt Kranz, said the Morena party administration, under President Andrés Manuel López Obrador (AMLO), had sparked jitters among the international investment community.

“There is great fear for foreign companies when they look at the panorama of what has happened in Mexico, particularly regarding the reception of and the attraction toward investment,” Délano told an online conference hosted by the German-Mexican chamber of commerce (CAMEXA), responding to a question about investment in mining exploration.

“There’s lots of fear and lack of certainty over the near future, in the coming 3-4 years, and unfortunately the opinion of our group is that there’s little clarity in the future that we see in Mexico regarding government support which would allow companies to come and take a gamble on Mexico and be content and sure that Mexico will respond,” he added.

Délano’s comments mirror concerns raised by Mexican mining chamber Camimex, which has urged AMLO to adopt policies which will deliver certainty and allow investment in the sector to grow.

AMLO has had a rocky relationship with mining investors, with the president delivering verbal attacks on the industry’s social and environmental record, and alleged failure to keep up with tax payments.

He has also pledged to overhaul mining regulations to better protect communities, and halted approval of new mining concessions.

AMLO also scrapped the undersecretary of mining post, a move which has been widely condemned by industry groups.