Will Mexican Law Curb Silver Supply?
Late last month, the upper house of the Mexican Congress approved a new mining royalty tax. The law would provide for a tax of up to 7.5% on mining profits, plus a 0.5% tax on mining revenue.
Mexico the largest silver producer in the world is home to such mining companies as First Majestic (AG), Endeavor Silver (EXK), Alexco Resources (AXU), Auricana (AUNFF), Great Panther (GPL), Pan American Silver Corp (PAAS) and Silver Standard Resources (SSRI).
Mexico is also one of the largest gold producing countries in the world with GoldCorp (GG) having a large gold mine in the country. Junior gold miners Newstrike Capital (NES.V) and Westridge Resources (WST.V) also have presences in Mexico.
Reduction in Production?
Will the new law, described as “mining reform” lead to a reduction in the world’s production of silver and gold?