November 20, 2018 / 10:56 PM / 20 days ago

Mexican miners sink on bill planning public consultations

MEXICO CITY, Nov 20 (Reuters) - Shares in Mexican miners Grupo Mexico and Penoles fell sharply on Tuesday after a lawmaker presented a bill that would require the consent of indigenous communities before granting mining concessions on their land.

The bill was presented by Senator Angelica Garcia from leftist President-elect Andres Manuel Lopez Obrador’s National Regeneration Movement (MORENA) party, which, along with its allies, holds majorities in both houses of Congress.

Mexican stocks have been rattled in recent weeks by another MORENA-backed bill in the senate that would cut bank fees as well as Lopez Obrador’s decision to scrap a partly built airport for the capital.

The moves have stoked uncertainty about economic policy under Lopez Obrador, who takes office on Dec. 1.

Shares in Grupo Mexico fell 5.4 percent to a nearly 2-1/2-year low while Penoles stock shed 4.7 percent, heading back towards a more than 2-1/2-year low hit last week.

Two analysts said the losses were fed by concerns about the impact of the bill, if it is approved. However, they noted miners were also seeing losses around the globe.

Mining stocks fell around the world on Tuesday due to concerns about global growth and mounting trade tensions between China and the United States.

Besides requiring the economy ministry and geological authorities to carry out consultations with indigenous groups, the plan also allows for cancellation of concessions if companies do not present annual reports on the social impact of projects.

Almost 30 years ago, Mexico signed an International Labor Organization convention where it committed to consult indigenous peoples on development projects that could affect them.

Local laws currently only oblige the government to carry out such consultations for energy projects. (Reporting by Noe Torres, Miguel Gutierrez and Michael O’Boyle Editing by James Dalgleish)

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