MEXICO CITY Mexicos plan to raise resource taxes could threaten future investment in its multibillion-dollar mining sector, an industry lobby group said.
The government proposes a 5-percent royalty on mining revenue to boost income from resource extraction. But miners warn that the tax, the first of its kind in Mexico, might deter investments.
"Taxes or royalties on economic income decreases financing for future exploration and reduces investment and ... the generation of value from the mining sector to the economy as a whole," mining chamber Camimex said.
Mexicos mining industry generated $23.12 billion last year, up 14 percent from 2011, while miners investments rose 43 percent to $8.43 billion, Camimex said.
The bill will be debated in the countrys senate by year-end following its recent approval in Mexicos congress.
However, some think the measures dont go far enough.
"Taxes paid by mining concessions here are minimal. It is both logical and necessary to impose higher rates so that the nation itself can benefit," Jose Angel Hernandez Puente, treasurer of the National Mining, Metallurgical and Similar Workers Union of Mexico, said.
A version of this article was first published in AMM sister publication Steel First.