Mexico's Tax Administration Service is holding in excess of US$360 million in tax rebates owed to six Canadian mining companies due to a spike in value-added tax refund requests leading to more detailed assessments, Reuters reported June 8, citing sources and official documents.
The figure includes US$230 million owed to Vancouver-based Goldcorp Inc., representing 142% of its 2016 net profit, while US$66.5 million is owed to Toronto-based miner Torex Gold Resources Inc.
Goldcorp holds several properties in Mexico including the Penasquito mine in Zacatecas, while Torex declared commercial production at its El Limon-Guajes gold operation in Guerrero in March 2016.
Canadian officials met with Mexico's government in the hopes of resolving the issue, which is hindering the mining companies' ability to invest in operations and is especially challenging for cash-strapped mining juniors.
The deferment of value-added tax rebates is further complicating mining investments in Mexico, along with cooling foreign direct investments, ongoing security threats and high royalty rates.
Canadian companies represent nearly 70% of foreign-owned miners operating in the country, according to the report.