--Mexican mining sector seen receiving a record $7.6 billion in
investment this year
--Mining companies expect investment to continue rising in
2013
--Industry leaders hope upcoming administration upholds current
mining policies
By Jean Guerrero
QUERETARO, Mexico--Investment in Mexico's mining sector is
expected to reach an all-time high this year of $7.6 billion, up
36% from 2011, and to keep rising in 2013 despite a decline in
international prices for most metals, top mining industry leaders
said Tuesday.
Copper mining company Grupo Mexico SAB (GMEXICO.MX) estimates
its investments in Mexico will increase about 40% next year
compared with 2012, said President Xavier Garcia de Quevedo,
speaking at a conference in the capital of the central mining state
of Queretaro.
The company's total mining investments will be $1.76 billion
this year, compared with $715 million in 2011. About $1.05 billion
of the 2012 investments were in Mexico. Grupo Mexico also has
mining operations in Peru and the U.S.
Mr. Garcia de Quevedo said the world supply of copper hasn't
been meeting demand, and that Grupo Mexico aims to ramp up
production.
Company officials said Mexico has become more of a mining
country than agricultural, as it is often perceived, and that the
investments it receives widely benefit its economy. They said they
hope the incoming administration of President-elect Enrique Pena
Nieto, who is set to take office Dec. 1, will uphold current mining
policies.
"We hope there are no modifications, such as new taxes," said
Humberto Gutierrez, president of the Mexican Mining Chamber and
chairman of mining company Minera Frisco SAB (MFRISCO.MX).
Mr. Gutierrez said despite lower prices this year for precious
metals besides gold, prices are still high relative to past years.
The value of mine production in Mexico is expected to rise this
year as increased output offsets the effect of lower prices, he
said. Minera Frisco expects to invest about the same amount of
money in mining next year as this year, he added.
The company reported capital expenditures of about $575 million
in the first nine months of this year.
Rafael Rebollar, director of metals and chemicals for Mexican
mining company Industrias Penoles SAB (PE&OLES.MX), said his
company expects investment to stay steady or increase slightly in
2013, with much of it allocated to exploration activities. This
year, Penoles invested $1.1 billion in mining, compared with $960
million last year. Penoles is the parent company of Fresnillo PLC
(FRES.LN), the world's biggest primary producer of silver.
"Investments are for the long term, we can't be thinking about
whether prices are high or low," Mr. Rebollar said. "If mining
companies stopped investing in exploration, their resources would
run out."
Ramon Davila, general director of the Canadian mining company
First Majestic Silver Corp., said he also expects investment in
Mexico to stay strong, noting that the company "remains optimistic
about silver prices."
Company officials said two of their main priorities for the
upcoming year are to improve communication about the benefits of
mining and, partly as a result, to amplify access to land.
"We need to improve the image of what we're doing," Mr. Davila
said.
A push for competitive energy prices and conservative water use
are also priorities, officials said.
Write to Jean Guerrero at jean.guerrero@dowjones.com
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