Mining sector Nordic Investment in Mexico Mining

Mining
Nordic Investment
in Mexico
Mining sector
The purpose of this document is to be only a general reference on certain areas of interest. The application and effect of the
law may vary depending on the specific data included herein. Omissions or inaccuracies are possible due to the changing
nature of the laws, rules and regulations. This document is distributed based on the understanding that the authors and
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cannot replace direct accounting, tax or legal professional advice, or any other type of advice. Before making any decision
or taking any action, we recommend calling upon a professional of PwC Mexico.
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Overview
Mexico is a top destination for exploration investment in Latin
America. According to the Mexican Mining Chamber (CAMIMEX),
in 2012 mining investment grew by 43% compared to the previous
year. There are over 800 active exploration projects mainly in gold,
silver, copper, zinc and lead. More than 15 projects are expected to
go into production within the next couple of years, and 35 projects
are in advanced exploration. With 70% of its territory still
unexplored, Mexico still has a lot to offer to the mining industry.
Currently however, primarily as a result of recent tax reforms, the
mining community has expressed dissatisfaction over the sector’s
prospects. Mining companies are working to quantify how the
recently approved 7.5% royalty on mining profits and 0.5%
environmental fee on revenues from precious metals will affect
their operations as of 2014. Companies are realigning projects,
budgets and their organisational structures to determine how to
best ensure returns for their shareholders in this new environment.
What will the future be for Mexico’s mining industry? Will it lose
its competitiveness? Will investment capital flow to other lower
cost jurisdictions in the region or the world? Mineral prices and
demand is low at the moment. The future is challenging.
Different perspectives
Mexico’s tax reform is one of the key initiatives under the Pact for
Mexico framework brought forth by the federal government,
aimed at attracting more foreign direct investment in industries
like communications, energy, technology, financial services and
mining. The ultimate goal is to make Mexico more competitive on a
global basis by leveraging the benefits of the increased economic
activity to invest in security, education, healthcare, infrastructure
and other pressing issues that limit Mexico’s development. The tax
bill was initially presented in March 2013 by a Deputy representing
the Institutional Revolutionary Party (PRI). The proposal was
partly incorporated into the final bill initiative presented by the
Federal Government in September 2013. When the tax reform was
initially created, commodity prices were high and mining
companies were enjoying very profitable operations. The mood
within the global mining industry was to grow at any cost. Today
the industry faces a very different environment. Demand from
countries like China has not increased at the same high rate as in
the last decade, the economies in other parts of the world have
slowed and as a result, the demand for metals has dropped. There
is a depressed mining industry landscape with lower commodity
prices, higher operating costs, and limited capital, which explains
the concern of miners with the implementation of higher tax
regulations.
Other amendments
In addition to the 7.5% royalty on profits and 0.5% tax on precious
metals, other mining-specific reforms were introduced:
•Tax deduction of exploration expenses will be made in a ten-year
period straight-line basis instead of the total investment in the
year incurred. Development expenses are not included, meaning
they could be totally tax deducted the year they are incurred.
•The option for the lump-sum deduction of assets (immediate
depreciation) has been eliminated. Instead, depreciation and
amortization will be applicable on a straight-line basis.
•A 50% tax on idle properties that do not operate for two
consecutive years within the first ten years of obtaining the
mining concession—or 100% if this occurs after the eleventh
year of obtaining the concession—will be imposed.
Changes were also made to income tax rules on withholding tax on
corporate dividends, the tax consolidation regime, provisions for
foreign residents, among others. If the tax amendments do result
in a loss of competitiveness, bigger efforts will be needed for
Mexico to continue attracting and increasing investment in the
sector from both domestic and foreign companies to remain an
important mining destination. With regard to the future, the
reality is that Mexico has immense mineral potential and will
continue to be of interest to miners. However, mining companies
will need to be more strategic in their options to make their
business more profitable. For example, they will need to continue
incorporating programmes to increase productivity, use green
energy, improve their human capital utilisation and effectively
manage stakeholder relations, including relations with the
communities.
The industry will be inwardly focused for a couple of years while
companies adjust to the new operating environment. Mining
investment forecasts will certainly need to be re-estimated, and
some companies, mostly juniors and mid-size, may decide to divert
their investments to other territories. The industry will increase its
focus on managing costs better and improving productivity in a
sustainable manner. Making their mine competitive when prices
are low always positions companies better when prices increase—
which they will. Mexico’s status as a top mining destination in the
region will very likely be challenged, but it will definitely continue
to be a good place for mining in the long term1.
Source: José Almodovar, PwC México Mining leader,
Pacific Alliance leaders “Improving business models”
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PwC Mexico
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World economy is a key driver for the mining industry
Five years after the global financial crisis, the world economy
continues to struggle. Growth in developing countries, the main
contributors to global growth, accelerated in the third quarter of
2012, although output of Latin America and the Caribbean has
slowed, as compared to the pre-crisis period. Global growth is
expected to strengthen to 3.1 and 3.3 percent in 2014 and 20152.
The share of mining activities of total industry value ranged from a
low of just over 0.04% in Mauritius, 0.06% in Puerto Rico, and
0.07% in Liberia to over 87.54% in Equatorial Guinea, and 69.6%
in Libya in 20093. The share of the mining industry in total value
added increased by nearly 43.7% from 2000 to 2009. In 2009,
three countries (Liberia, Jordan, and Montserrat) increased their
mining share by 150%, 96.46%, and 90.07%, respectively, over the
previous year. The Dominican Republic, Singapore, and Tunisia, on
the other hand, decreased their share by 50.68%, 33.33%, and
30.43%, respectively, for the 2008-2009 period. The global mining
sector went into steep decline during the financial crisis, although
it remained one of the main pillars of the global economy acting as
a supplier for a wide range of industries.
Rank and share in production of mineral commodities
(precious metals; gold and silver) as a % of global
total volume by country, 2012
World mining production as a % share by country, 2009
USA
46.6%
Rest of Americas
20.2%
Brazil
13.8%
Canada
11.5%
Mexico
7.9%
Source: ISI Emerging Market.
Silver production per country 2012
Nr 1 Mexico,17.7%
Nr 2 China, 15.8%
Nr 3 Peru,14.4%
Nr 4 Australia, 7.9%
Nr 5 Russia, 6.2%
Nr 6 Bolivia, 5.4%
Nr 7 Poland, 4.9%
Nr 8 Chile, 4.7%
Nr 9 USA,4.4%
Nr 10 Canada,2.2%
Source: USGS.
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Nordic investment in Mexico
3
Source: World Bank and the United Nations.
Source: United Nations Statistics.
Gold production per country 2012
Nr 1 China,13.7%
Nr 2 Australia, 9.3%
Nr3 USA, 8.5%
Nr4 Russia,7.6%
Nr5 South Africa, 6.3%
Nr 6 Peru, 6.1%
Nr 7 Canada, 3.8%
Nr 8 Indonesia, 3.5%
Nr 9 Uzbekistan, 3.3%
Nr 9 Ghana, 3.3%
PwC Mexico
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Industry establishments and institutions
The mining industry in Mexico is regulated by the Department of the Economy through the General
Mining Coordination and General Mining Department, which is divided into different offices,
sub-offices, and mining agencies.
Government Authorities
Ministry of Economy
Secretaría de Economía (SE)
General Direction
for Mining Promotion
Established for:
Established for maintenance of relations
with the State Governments and Social
Mining.
• Public mining registry;
• Maintenance of Mining Cartography
Registry (Cartografía Minera);
• Identification of all mineral deposits in the
country and supply of geological
information to the public;
• Promotion of exploration, exploitation,
benefaction, industrialisation, and
commercialisation of minerals by
providing technical assistance and credit
to mining concession holders.
www.economia.gob.mx
General Mining Coordination
(Coordinadora General de Minería
de la Secretaría de Economía)
Established to coordinate Mining Policy,
implementation, and enforcement of the
Mining Law (Ley Minera).
General Direction for Mines
Responsible for application of the Mining
Law.
Mexican Geologic Service
(Servicio Geologico Mexicano)
Established to generate and provide
knowledge for territory planning and
better exploitation of natural resources.
Mining Promotion Trust
Financing of small and medium
companies interested in investing
in the mining industry.
Influential organisations and industry associations
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Industry establishments and
institutions
Description
Website
ProMéxico
Established to promote the export
supply and support the
internationalisation of Mexican
companies by attracting foreign direct
investment.
www.promexico.gob.mx
La Cámara Minera de México
(CAMIMEX)
Established to elaborate laws,
standards and regulations related to
the sector, promote mining activities,
and financially support universities
that offer related degrees.
www.camimex.org.mx
Nordic investment in Mexico
Modern trends in the
Mexican mining industry
Variation of Mexican mining production of precious metals
as an annual % change, 2007-12
30%
Gold
While the drop in prices for some metals has not been as severe as
during the 2008-09 global recession, the fall from record or
near-record levels in 2011 has created some setbacks. A drop in
commodity prices has led to lower revenues for mining companies,
causing most to cut back on operations and spending. In some
extreme cases, companies have taken billions of US dollars worth
of write downs to account for the lower value of their assets
compared to only a couple of previous years. Few commodities in
the mining sector have escaped the downturn caused by global
economic uncertainty and volatile markets. Gold, silver and copper
are among the most closely watched metals. They were also some
of the hardest hit in 2013.
25%
We believe that the long-term fundamentals supporting metal
prices remain strong and will help to drive the industry’s
turnaround story. While gold, silver and copper may not reach
record levels in the near future, we expect prices to increase,
alongside a stabilising global economy4.
Source: Statistical Yearbook of the Mexican Mining, 2013, 2012, 2011, 2010, 2009,
2007, 2008
Silver
20%
15%
10%
5%
0%
-5%
2007
2008
2009
2010
2011
2012
Gold production by state, 2012
29.2%
Mexican mining, digging its way in the world
21.1%
Thanks to large reserves of important minerals and due to
investment friendly business environment, Mexico is one of the
major players of the global mining industry.
19.2%
10.9%
Mexico has a long history in mining that dates back to the colonial
period, diverse geography and rich geology, and a skilled
workforce to foster a strong, sustainable and dynamic mining
industry. Mexico is an important global player for mining
investment and production5.
10.4%
Sonora
Zacatecas
Chihuahua
Guerrero
Others
Durango
9.2%
Source: SE, January 2014
Silver production by state, 2012
43.6%
19.2%
Zacatecas
Chihuahua
Others
15%
Durango
12.1%
Sonora
6.7%
México
3.4%
Source: SE, January 2014
4
5
Source: PwC “Gold, silver and copper price report 2014”.
Source: ProMexico (thhp://negocios.promexico.gob.mx/20.2.2014)
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Variation of Mexican mining production of industrial
non-metallic minerals as an annual % change, 2007-12
200%
Copper production by state, 2012
Sonora
Copper
Zacatecas
Zinc
150%
San Luis Potosí
Molybdenum
77.8%
Lead
100%
Others
Chihuahua
10.2%
4.6%
4.2%
3.2%
50%
Source: SE, January 2014
Lead production by state, 2012
0%
2007
2008
2009
2010
2011
2012
Zacatecas
Chihuahua
-50%
53.2%
Source: Statistical Yearbook of the Mexican Mining, 2013, 2012, 2011, 2010, 2009,
2007, 2008
22.3%
12.1%
8.4%
4%
Others
Durango
Aguascalientes
Source: SE, January 2014
Variation of Mexican mining production of metallic minerals
as an annual % change, 2007-12
60%
Iron production by state, 2012
27.2%
21.3%
Coal
50%
19%
Iron
40%
Manganeso
30%
14.5%
9.2%
20%
8.8%
10%
0%
10%
2007
2008
2009
2010
2011
2012
20%
30%
40%
Source: Statistical Yearbook of the Mexican Mining, 2013, 2012, 2011, 2010, 2009,
2007, 2008
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Nordic investment in Mexico
Source: SE, January 2014
Michoacán
Coahuila
Colima
Others
Jalisco
Sonora
Foreign investment and international trade
The Latin American region continues to be one of the most attractive places for mining investment due
to its large resource base, especially non-renewable resources. Latin America spent about 25% of the
world total (18.2 billion USD) in mineral exploration in 2011. Over the last two decades, the Mexican
government has removed several investment requirements and created a legal framework, e.g. the
North American Free Trade Agreement, to encourage investment in the mining industry. The
liberalisation of the mining industry resulted in an increase of investment in that area. Mexico moved
up two positions to be placed fourth in the investment in the world, behind Australia and the United
States and it is the first in Latin America for mining exploration investment. According to Economics
Metals Group (MEG), Mexico received 6% of global investment in 2010. Companies belonging to the
Mexican Mining Chamber (CAMIMEX) have reaffirmed their commitment to the country and
announced additional new investment of $7 thousand 647 million dollars for 2012, thus exceeding
the $25 thousand million dollars accumulated in the 2007-2012 period.
As stated previously, legislation in Mexico has undergone some adjustment over the last two decades.
According to this framework, foreign companies wishing to enter the mining industry must register a
Mexican corporation or enter into joint ventures with a local entity or partner.
The composition of foreign participation in exploration and production in Mexico in 2012 is shown in
the Figure ‘Investment in exploration in Mexico as a % share’ and in ‘Investment in production in
Mexico as a % share’.
Private investment in the Mexican mining industry in million USD, 2006-12
4,720
%
100
90
3,656
80
Value, million USD
5,000
4,561
3,316
70
60
2,858
50
40
30
1,923
2,156
4,000
3,500
3,000
Others
2,500
Environment
2,000
Acquisition and
replacement of equipment
1,500
Increasing the capacity
and efficiency of operation
20
1,000
10
500
0
2006
2007
2008
2009
2010
2011
2012
0
New Projects
Foreign Investment
Foreign Investment
Total
Note(s): (19), (20) See the Table Notes section
Source: Statistical Yearbook on the Mexican Mining, 2012
Investment in exploration in Mexico as a % share
Investment in production in Mexico as a % share
Foreign
60%
Foreign
70%
Mexican
40%
Mexican
30%
Source: CAMIMEX.
Source: CAMIMEX.
PwC Mexico
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Technology development
Suppliers in the mining industry include producers of mining and production equipment, IT providers,
and also suppliers of raw materials such as the iron ore, coal and coke needed for the production of
steel. Although the majority of companies rely on raw material producers, many are highly vertically
integrated and provide their own raw material.
Mining equipment
According to Business Sweden, there were a total of 174 mining equipment suppliers in Mexico in
2011 and more than 90% of the machinery was imported. Local manufacturers focus on providing
parts for conveyor belts, sieves, stone crushers and grinding equipment. Business Sweden states that
mining companies like Grupo Mexico, Industrias Peñoles, Empresas Frisco, Minera Autlan and Grupo
Acerero del Norte represent around 80% percent of equipment demand, with the remaining 20%
coming from over 500 small and mid-sized mining companies.
Technological advances in metallurgical mining industry in Mexico, 1530 -1970
1555
1800
Amalgamation
with mercury
Use of tequesquite was
discovered in smelting
1676
1800
Poweruse
The first big pumps
for dewater were used
1530
Animal use
1530
1570
1610
1650
Source: Peñoles
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Nordic investment in Mexico
1690
1895-1910
Air drilling: Pachuca tank
communication & Silver-Gold
electrolysis; Sulphur flotation
1821-1840
1860-1900
Steam pumps
were introduced;
Use of other
steam machines
Grinding balls;
Crushing machine;
Carbide lamp
& dynamite
1940
Acidlixiviation
Process
1947-1970
Electriclamp;
Hidraulic drilling
1800
Scoop tram
1790
1890-1900
1970-1980
Man was substituted
by animal in
amalgamation
Railroad;
Electric energy
Computation;
Satellite
1690
1770
1810
1850
1890
1930
1970
Tools &
Equipments
Services
Modern trends in the Mexican mining industry
There is growing demand for robotics and underground excavators among mining companies in
Mexico. Digitalisation and satellite images are widely used by companies in Mexico in order to spot
ore reserves. The biotic-bioleaching process is now used in Mexico to extract the specific metals i.e.
gold and copper from ore.
Modern development and future trends in the global mining industry
•Tele-operation
•Autonomous trucks & shovels
•Rapid excavation
•Process integration – mine to mill, mill to mine
•Mining and remediation with plants
Infrastructure
Mexican President Enrique Peña Nieto has announced the National Infrastructure Programme (NIP),
which is expected to guide the nation’s development plans for the next six years. According to the
programme, the government of Mexico will invest several billion USD in its infrastructure and seek
private funding to finance the new plan.
A notable increase is forecasted in investment in railways while roads and bridges, airports and ports
will see only marginal decline. Although public investment is expected to slow, private investment
should pick up. As a result, growth is expected to decline to 4.1% per year from 2013 to 2016. In 2011,
the predominant mode of transport for Mexican mining exports and imports was charter transport,
with 55.25% of total export value and 50.84% of total import value, respectively. Therefore, due to
high dependence of the mining industry on infrastructure, mining companies invest in road
construction and improvement of utilities.
PwC Mexico
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Mining Legislation
Investing in Mining
Investment in the mining sector worldwide has increased dramatically in recent years, and as long as
high prices in minerals and precious metals remain at currents levels, investments in this sector will
continue this tendency, including Mexico. Mexico has a long mining tradition. The territory holds vast
wealth and a high potential for mineral resources, which makes it imperative to promote government
policies, programmes and actions as well as sound business practices focused on sustainable
development and corporate social responsibility, so that those resources can be exploited in a
comprehensive and sustainable manner for the benefit of the nation and of the regions in which the
deposits are found, thus contributing to well-being of the community and job generation.
Currently a new Mining Law is being reviewed by the executive legislators and will be presented and
discussed with the legislative representatives. This topic is included in the ordinary sessions from
February to April 2014.
In order to orient investors in the mining sector, the following are the most usual and important legal
procedures involved:
1. Mining concessions
A mining concession confers no rights to the surface of the land, but only to concessionable mineral
resources in the terms of the Mining Law. Therefore, in order to conduct exploration and exploitation
work, the concession holder must establish a private agreement with the owner of the land surface, or,
when applicable, request and receive a temporary occupation resolution from the Department of
Economy, pertaining to the land surface required for its operations, or from the Agrarian Reform in
the case of expropriated communal land. Mining concessions give the concession holder the right to
explore, exploit and process concessionable substances located within the mining lot covered.
Fifty-year mining concessions have been issued since 2006, renewable for another 50 years. Likewise,
coal gas can be exploited, once the holder of a concession to a coal lot has secured the respective
permits and authorizations from the Department of Energy. Current mining legislation comprises the
Mining Law and the Regulations thereto, the Manual For Mining Services to the Public and the
Instructions for Mining Agents, as well as the forms for the procedures required to be carried out at
the Department of Economy. With regard to the payment of mining rights, The Law of Government
Fees and Duties is applicable to the regulations pertaining to mining procedures.
Some of the most important mining procedures are:
•The request for a Mining Concession or Assignment and the reduction, division and unification of
any titles issued in that regard.
•The request to participate in a Bidding Process for awarding a concession.
•The request to desist from holding a Mining Concession or Assignment, as well as requests and
promotions in process.
•The request to register acts, contracts and agreements involving the transfer of ownership of Mining
Concessions or the respective rights.
•The notification of the beginning of operations for processing ore or concessionable substances.
•Obtaining temporary occupation or creating an easement of the indispensable land for conducting
the ore exploration, exploitation and processing work.
•Reporting and demonstrating execution of the exploration or exploitation work on mining lots.
•The request for annulment, suspension or repeal of rights to mining lots. The latter must be
submitted to the General Office of Mines.
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Nordic investment in Mexico
2. Foreign Investment
In Mexico, the legal framework that regulates investment by non-Mexican individuals or entities is the
Foreign Investment Law (FIL), with a purpose of establishing and regulating the activities in which
those individuals or entities are allowed to participate; it assigns percentages, limits, restrictions or
conditions for percentages of participation.
3. Permits for the acquisition of real property
The acquisition of real property, the exploitation of mines and water and the creation of trusts by
foreigners must be registered at the National Foreign Investment Registry. Registration must be
carried out within 40 business days as from the date of incorporation of the company or acquisition of
an interest in foreign investment, from the date of certification of the documents pertaining to the
foreign company, or from the date on which the respective trust is created or trust beneficiary rights
are granted to the foreign investor.
4. Environmental procedures
The exploration, exploitation and processing of ore and substances reserved for the Federation in the
terms of the Mining Law, are subject to evaluation of the environmental impact and the procedure for
changing land use.
It should be pointed out that mining prospecting is exempt from the procedure; NOM-120SEMARNAT-1977 is applicable to direct mining exploration and can be applicable to that stage,
provided the work is in line with the parameters established therein; otherwise, a Preventive Report
must be filed at the Department of the Environment and Natural Resources. When the mining project
is in the exploitation phase (with or without the installation of ore processing), the head of the project
must submit a Manifestation of Environmental Impact, which, depending on the nature of the project,
may also require a Risk Study. When mining activities are to be carried out within the buffer zone
adjacent to some Protected Natural Area, there are changes in the procedures to be followed, basically
concerning the importance of minimising the environmental impact and important restrictions on
activities within those zones. In that case, the National Commission for Protected Natural Areas of
that same Department must be considered.
5. Land-use rights
As mentioned, a mining concession confers no rights to the surface of the land, but only to the mineral
resources in the subsoil. Therefore, in order to conduct exploration and exploitation work, the
concession holder must establish a private agreement with the owner of the land surface, or, when
applicable, request and receive a temporary occupation resolution from the Department of Economy,
pertaining to the land surface required for its operations, or from the Agrarian Reform in the case of
temporary occupation or easement of expropriated communal land. When communal land is used, the
National Agrarian Registry controls the holding of communal land and provides documentary
juridical security derived from application of the Agrarian Law, which may make it necessary to carry
out formal procedures at that Agency.
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6. Water usage
Water use is subject to the National Water Law, to the Federal Law of Government Fees, Levies and
Duties and to an environmental impact evaluation by the Department of Environment and Natural
Resources.
The respective concession rights must be secured and water dues must be paid for each type of
assignment or concession issued to exploit, use or process national waters, including registration. In
the case of residual water discharge, payment must be made for each permit for the discharge of
residual water from industrial processes to a receiving body, including registration.
7. Use of explosives
The following permits for the use of explosives must be secured from the Defense Department:
•The general permit for the purchase, storage and consumption of explosive materials for the mining
industry.
•The general permit for the purchase and consumption of explosive materials for the mining
industry.
Recognition of the Legal Representative, as well as any change in same designated by the holder of the
General Permit. The user must request approval for the security and location of sites for consumption,
as per the official model signed by the Municipal President (one for each consumption site), for the
work area in which explosives are to be used, and must request an inspection by the respective
Military Zone. As concerns references to the consumption site, “Protection barrier” means any natural
land elevation, artificial wall no less than 1 m wide constructed of earth, adobe or sacks of sand, or a
forest of a density such that the surrounding areas requiring protection cannot be seen from the site at
which explosives are to be consumed, even when the trees are leafless. The State Civil Protection must
be requested to secure a favourable opinion from the Governor of the State. Once approval has been
secured from the Governor and from Civil Protection and a plan has been prepared specifying the
infrastructure of the site for the use, handling and storage of explosives, that approval is sent to
Mexico City for the Defense Department, through the General Office of Firearm Registration and
Control of Explosives, to analyse the request and issue authorization for the purchase from suppliers,
following an inspection visit by the Military Zone.
8. Exploitation of gas in coal mines
The Mining Law specifies that mining concessions confer the right to secure a permit from the Energy
Department for the recovery and exploitation of coal gas and that the holders of concessions to coal
deposits may associate to recover, self-consume and exploit gas associated with carbon deposits, once
authorization has been secured from the Energy Department. For that purpose, the following permits
must be secured from the Department of the Economy:
•A permit for the recovery and exploitation of gas associated with coal deposits.
•Authorization to associate for the recovery and exploitation of gas associated with coal deposits, as
well as the type of files and documentation attached to both requests.
9. Company incorporation
The process of incorporating a company begins with the permit issued by the Department of Foreign
Affairs. Once that has been secured, a notary public or official appraiser must certify the charter of
incorporation within the following ninety days.
The Department of Foreign Affairs must be notified of the use of the permit within the six-month
period following issuance. That notification must specify that the charter of incorporation includes a
clause excluding foreigners, or specifying that current or future foreign partners must agree to be
considered by the Department of Foreign Affairs to qualify as Mexican nationals as concerns all
shares, equity units or rights acquired pertaining to the company, and all goods, rights, concessions or
interest held by them in the company and all rights and obligations arising from the contracts entered
into by the company. Likewise, it must include a statement waiving the protection of their governments;
otherwise, the penalty is the forefit of all rights and goods acquired, in favour of the Nation.
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Nordic investment in Mexico
Conclusion
While 2013 was a tough year for miners, the industry is positioning itself for a time, hopefully in the
not too-distant future, when fundamentals will improve. Still, luring investors back into the mining
sector will require strict cost management strategies and responsible investment in production
growth. Miners are already heading in the right direction in both fronts.
We believe the long-term fundamentals supporting metal prices remain strong and will help to drive
the industry’s turnaround. While gold, silver and copper may not reach record levels in the near
future, we expect prices to increase, alongside a stabilising global economy6.
After all, it’s called a mining cycle for a reason.
6
Source: PwC Gold, Mining and Copper report 2014.
PwC Mexico
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MPC: 041404_GM_Mining
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