An analytical piece on the investing website The Motley Fool cited Americas Market Intelligence’s recent whitepaper, Managing Mining Risk in Latin America. The article focus was on whether mining investors should consider First Majestic Silver and looked at challenges with the company’s acquisition in San Dimas, mentioning risk issues:
Will turbulence in Mexico hit San Dimas?
First Majestic’s acquisition in Mexico comes at a time when the mining industry in the nation is shrouded by clouds of uncertainty. In late November, Mexico’s new Congress initiated bills calling for a revision of the country’s mining code that includes greater power to indigenous communities and potential revocation of permits for mines with a negative social impact, among other things.
The risks, in fact, go beyond local communities. An October report by consultancy firm Americas Market Intelligence titled Managing Mining Risks in Latin America lists seven such major risks, including political interference, regulatory instability, and economic concerns. San Dimas is already reeling under labor trouble, so that’s one area investors need to be wary of.
There is a silver lining, though. First Majestic believes its strong relationship with Mexico’s national union of mining workers should help end labor issues even as the company is trying to resolve long-pending tax disputes related to Primero’s streaming agreement with Wheaton.
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