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Mexico's new mining taxes were met with strong opposition when they were announced last year, with major producers Goldcorp and Grupo México warning they may be forced to ax future investment in the country as a result.
But the initial impact of the taxes, which came into effect on January 1, appear muted in first quarter corporate earnings reports and were dwarfed by drops in metal prices.
As part of a raft of tax reforms, the senate approved a 7.5% royalty on mining sales and a 0.5% gross revenue charge on gold, silver and platinum mining.
Taking into account deductions, the impact of the taxes on after-tax cash flows was expected to be around 4-5%, according to analysts.
However, falls in precious metals prices were far steeper, with gold down 20.7% in London to US$1,293.06/oz in Q1 from the year-ago period, while silver declined 32% to US$20.475/oz.
GMex US-based subsidiary Southern Copper, Mexico's biggest copper producer, saw its effective tax rate rise to 39.1% in Q1 from 32.8% a year earlier.
The 7.5% tax accounted for 5.1% of the 6.4% rise, or US$26.7mn, according to the firm's Q1 MD&A report.
Canada's Alamos Gold, which has its only operating mine in Mulatos, Sonora state, saw its effective tax rate rise to 42% from 33%. But the figure includes US$4mn in non-deductible expenses in Canada and Turkey, where the company has a number of gold projects.
Meanwhile, SilverCrest Mines estimated the cost of the 7.5% charge at US$493,000 in the quarter, out of total taxes of US$2.24mn, from US$4.71mn in earnings before taxes.
The company produced 201,101oz silver and 7,545oz gold in the quarter at its sole operating Santa Elena mine, also in Sonora state.
The effect of the 0.5% precious metals tax is harder to evaluate as it is included in operating expenses.
Total taxes paid by the main Mexican mining companies in the quarter – GMex, Minera Frisco, Industrias Peñoles and Minera Autlán – declined 17% to 4.32bn pesos in Q1 despite the new taxes, impacted by falls in metals prices, local financial daily El Financiero reported.
While Q1 appeared slow in terms of M&A in Mexico, there was little evidence of the large-scale drop in investment that some industry insiders have predicted.
While the new taxes were among the reasons cited, a moratorium on new water drilling and the impact of lower metals prices were also mentioned, with the latter likely to have had a far larger impact than taxes.
And there have been some surprisingly positive signs from the sector, with figures from statistics agency Inegi showing a 6.6% increase in mining activity in March and a 0.6% rise in production in February compared to the same months in 2013.
Mexico is the world's largest silver producer and a significant producer of gold, zinc, lead, copper and iron ore.