Bloomberg reported that Mexico's mining industry investment may drop as much as 30% through 2012 as companies slash exploration because of lower metal prices and labor disputes.

Mr Sergio Almazan ED of Mexico's Mining Chamber said that Domestic and foreign companies may invest USD 10.5 billion during the five year period ending in 2012. The chamber said in 2008 investment would reach USD 15 billion in that period.

Mr Almazan said that investments are lagging 20% or 30% due to the current economic and labor environment."

He said that "Most of the needed closings and job cuts, due to financing problems, already happened in the last quarter of 2008."

According to Mr Almazan, labor disputes since 2006 have cost mining companies in Mexico USD 3 billion in lost production.

Mr Almazan said that mining association is not expecting more mines to close this year in Mexico.

He said that "I think companies are being forced to reduce costs and be more efficient." He expects copper prices to average USD 1.80 a pound this year.

Mr Almazan said that Mexican copper production should increase as much as 40 percent this year to 350,000 metric tons, according to the mining chamber. Gold output should have a similar growth rate, with production of 70 tonnes this year and 100 tonnes in 2010.

(Sourced from Bloomberg)