Exclusive: Top Mexican miners owe $180 million in 2015 royalties - government study

Tue May 16, 2017 9:52am EDT
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By Alexandra Alper

MEXICO CITY (Reuters) - Top Mexican miners Grupo Mexico, Penoles, Fresnillo and billionaire Carlos Slim's Frisco together owe nearly $180 million in mining royalties to Mexico for 2015, according to preliminary government figures seen by Reuters.

The documents, which are part of an industry-wide review for tax compliance led by Mexico's tax authority, estimate Grupo Mexico (GMEXICOB.MX: Quote) owes some 1.7 billion pesos ($91.4 million) on a 7.5 percent mining royalty on extractive profits for 2015.

For the same levy, Penoles (PENOLES.MX: Quote) and Fresnillo (FRES.L: Quote), which belong to Grupo Bal, owe some 962.6 million pesos and 492.6 million pesos respectively, the figures show, while Frisco (MFRISCOA1.MX: Quote) owes some 189.1 million pesos.

Neither Frisco nor Penoles paid anything for 2015 for the mining royalty, while others' payments fell short of estimates, according to preliminary government accounts for the second year the levy was in force. Reuters could not determine whether the companies had received the government estimates. (Graphic: tmsnrt.rs/2rjQrij)

The review is the latest chapter in a stand-off between the government and the industry, whose production is worth about $13.5 billion annually and which critics accuse of profiting for years without paying their fair share, and part of a broader effort to boost the tax take as oil revenue falls.  

"It doesn't surprise me...this has been a recurring situation in Mexico," said Patricia Legarreta, investigative coordinator at PODER, a non-governmental organization that seeks to boost corporate transparency in Latin America. "It's very important that (the companies) are audited," she added.

Government sources said the data did not necessarily mean companies had broken the law. Instead the review, launched last year, was aimed at determining whether royalty payments should be scrutinized further.

The data is based on a preliminary comparisons of tax returns and annual reports and includes tax credits that companies can offset against the payments.   Continued...

A logo of Mexico's tax authority SAT is seen on a building in Mexico City, Mexico, May 15, 2017. REUTERS/Edgard Garrido