Sector: Minning, Product: Steel |
Factor/Country | Mexico | Chile |
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Political - Legal Risk | Foreign investment:The attraction of foreign direct investment (FDI) has been functional to the strategy and has become one of the pillars of macroeconomic to solve the current account deficit. This strategy is embodied in numerous bilateral and multilateral agreements that benefitforeign investment. Even so, the country needs to support the competitive advantage of firms through changes in tax regulations consistent in granting tax incentives for mining exploration, exploitation, foreign investment, creation of mining companies and mining companies developing competitive.Government Regulations:In Mexico, the mining sector is regulated under various laws establishing nationalownership to all minerals, so for the exploration and exploitation is necessary to obtain certain permits and concessions. Since 2007, there was a change in the way of granting the concessions, which were previously given for explorations and exploitation separately and since 2007, it is granted only one concession for the two functions. Other Facts:In recent years the Mexican economy has grown 3%,below the proposed targets, which for the third consecutive year; economic growth stagnated in the country. Annual inflation was 3.98%, interest rates remained at historically low levels and international reserves reached a record above U.S. $60 billion. According to figures from INEGI (INEGI, 2010), the mining industry in particular keeps rising the combination result in moderate physical volumeof major metals and increases in their prices. Mining worldwide is maintaining its growth cycle, in which the prices of a large number of mineral commodities are reaching levels not seen in decades. And here lies the great value of Mexican mining opportunity. | Foreign investment:Approved foreign investments (FDI) in Chile between January and October 2010 reached U.S. $13,257 million, the highesthistorical level of foreign investment in the country and represent an increase of 201% over the same period last year. Much of the approved investment (82.9%) corresponded to mining, with 23 initiatives totaling U.S. $10,980 million. The services sector followed with 16 projects worth U.S. $1,205 million, equivalent to 9%. The political level of Chile established self-governance for theinstitutions to work and do so continuously. In addition the government has the ability to manage conflict and leads society to achieve the resolution of these.
In the case of Chile there were no significant political groups that are placed outside of the political system.
On the economic level, Chile has strong a economy, since it has proved a long economic history that it hasbeen able to keep stable, even if the scenario has not been favorable for such as regime change or global crisis. (This is Chile, 2010)
Chile has been able to project economic stability even to sign important agreements with other economic actors. Chile lead the economic expansion in 2011, with a rate close to 6%, added the executive secretary of the Economic Commission for Latin America and theCaribbean |
Economic - Technological Risk | Communications and infrastructure: Mexico has several ports for the export of minerals. One of the most important is to Manzanillo (Puerto Manzanillo, 2010), which among other advantages:
Its area of influence extends to 74 international destinations in the world, for its development potential is in the main chain of the Pacific Rim.
OtherFacts: Theft of steel: steel theft according to information from the National Iron and Steel increased by 250% during 2008.
The losses were about U.S. $10 million, equivalent to 12500 tons of steel products.
The mining sector, including steel, depends heavily on energy products such as gas and electricity. So the increase that has occurred in the prices of these inputs has affected production...
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