Mexico lures mining with laws that ease rules, allow foreign

Prospects for a significant revival in the Mexican mining industry have been given a shot in the arm by recent changes to that country’s mining laws. On Sept. 27, 1990, the Mexican government officially issued new regulations for its mining law as part of a national program to modernize the country’s mining sector by 1994.

The regulations are intended to simplify the bureaucratic procedures in granting mining concessions. There are also new regulations governing foreign investment which will permit 100% foreign control in some industial sectors including mining.

In the past, foreign shareholders were restricted to a maximum 49% interest in mining operations which acted as an impediment to investment. Mexico’s high total tax burden for mines was also a negative feature of the industry. A handful of Canadian companies are currently active in Mexico including, Cominco Resources International (TSE) and Chutine Resources (VSE).

Last May, a national mining forum was convened in Guadalajara, Mex., with the specific purpose of discussing the problems and future of mining in Mexico as well as its impact on foreign investment and possible changes to the mining law.

The forum attracted private sector participation of companies such as Asarco (NYSE) and Kennecott Corp. which are already doing some prospecting work and looking ahead to aggressive exploration programs in Mexico.

As the top producer of silver in the world, Mexico still has significant mineral potential for porphyry- type copper depsosits, replacement- type lead/zinc deposits and precious metal ores.

“Foreign and Mexican investors are seeking new business enterprises in Mexico and the mining industry is attracting the most attention,” said Gilbeto Rodriguez, a Mexican mining consultant.

Toronto-based Campbell Resources (TSE), which has extensive property holdings in Mexico, is also bullish on the prospects for a revival of mining in that Spanish-speaking country.

Officials at Campbell believe Mexico is “one of the best underdeveloped mineral areas in North America.” They say “modern technologies and a more business- oriented government will result in a tremendous increase in exploration and development activity in the coming years.