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Mexico mining exploration investment seen at lowest in 14 years

Mexico's mining industry expects exploration investments this year to decline to their worst level in 14 years, even before taking the coronavirus pandemic into account, the country's top sector association said on Tuesday.

By Noe Torres

MEXICO CITY, Aug 25 (Reuters) - Mexico's mining industry expects exploration investments this year to decline to their worst level in 14 years, even before taking the coronavirus pandemic into account, the country's top sector association said on Tuesday.

The Mining Chamber of Mexico (Camimex) said spending was expected to fall to $399 million this year due to a drop in investor confidence. The figure would be a 25.6% drop compared with last year and mark the lowest investment since 2006.

Fernando Alanis, president of the association, said the 2020 estimate would continue a trend over the last few years of weakening investment in the sector.

Since taking office in December 2018, President Andres Manuel Lopez Obrador has sustained a rocky relationship with the business community over moves including the cancellation of a major new airport and a push to boost state control over the energy sector.

"Mexico has lost its appeal as a mining investment destination, that's a fact," Alanis told a news conference, calling for long-term certainty in tax and legal matters to boost growth once more.

"This is essentially the reason why our investment in exploration is falling so much."

The forecast from Camimex - whose members include Grupo Mexico GMEXICOB.MX, Minera Autlan AUTLANB.MX, Industrias Peñoles PEOLES.MX and the Mexican unit of U.S. company Newmont Mining Corp NEM.N - was based on the 2020 budgets mining companies presented in December.

"Surely, (the forecast) will be impacted by COVID-19," Alanis added. The figures were released as part of Camimex's annual report published on Tuesday. Alanis said the industry group was seeking fresh forecasts from the companies.

The sector received investment of $536 million last year, compared with $596 million in 2018, and $612 million in 2017.

(Reporting by Noe Torres in Mexico City Writing by Daina Beth Solomon Editing by Frank Jack Daniel and Matthew Lewis)

((daina.solomon@thomsonreuters.com; +52 55 5282 7150;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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