Mexico mining investment set to slump in 2019

Investment in Mexico's mining sector will slump this year, with the drop driven by uncertainty over government policy.

Total spending is forecast at US$2.60bn, down from US$4.55bn last year, according to industry chamber Camimex.

The 2019 forecast represents a 12-year low in investment and is a fraction of the 2011 peak of US$8.04bn.

"Mexico is losing its attractiveness as a mining jurisdiction globally," chamber president Fernando Alanís told local daily La Jornada, citing a lack of clarity over mining policies.

President Andrés López Obrador (AMLO) has called for communities to be consulted on mining projects and pledged tougher mining safety and environmental regulations.

But question marks hang over his proposals after AMLO axed a first consultation planned for Invecture Group's controversial Los Cardones gold project in Baja California Sur state, while a draft bill outlining stricter community and environmental rules was blocked in the senate last year.

Alanís also criticized the Mexican president's plans to use mining royalty proceeds to fund small loans for local residents, favoring the previous scheme in which proceeds were used to pay for infrastructure projects.

Camimex previously lowered its investment figure for 2018 to US$4.55bn from the US$5.26bn originally forecast for the year.

The 2019 investment forecast casts doubts over the Mexican government's ability to spur higher spending in the mining industry, with mining undersecretary Francisco Quiroga targeting a return to the 2012 peak levels of around US$8bn/y, news website Opportimes reported.