Investment in mining exploration will fall below $ 399 million in 2020, estimated Fernando Alanís, president of the Mexican Mining Chamber (Camimex).
Previously, capital in mineral exploration totaled 596 million dollars in 2018 and 536 million dollars in 2019.
Exploration is the initial stage of mining activity. It consists of locating the areas where the mineral deposits are located that have the potential to host a mining project.
Mining exploration is regulated by the laws and regulations of Mexico and follows measures and protocols established by government institutions. These rules protect all the miners that are part of the project and the communities close to the operation.
Total investment in mining in Mexico totaled 4.657 million dollars in 2019 and Camimex projects that by 2020 that amount will be less than 4.981 million dollars.
The level of investment in exploration determines the number of projects that can be developed in the future.
In 2019, the allocation of resources for mineral exploration experienced a 25% decrease. This decrease is the result of a less competitive tax regime for this initial stage of the industry.
Since the elimination of the deductibility of exploration and pre-operating expenses with the 2014 tax reform, investment in exploration has fallen by about 40 percent.
To make the best use of the country’s geological potential, Mexico must continue to attract investment in mineral exploration that will develop the next generation of mineral deposits.
“The sector will continue to insist on once again achieving that preoperative exploration expenses are 100% deductible in the same year in which they are generated in order to encourage investment,” said Camimex.