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Energy
Pemex Unveils Rules For New Contracts
January 8, 2010
Following approval by its board of directors, Pemex published new rules for incentive-based contracts that it intends
to use in order to attract private firms, both Mexican and foreign, to develop crude exploration and production
projects. The first contracts under this new regime are expected to go out to bid during the first half of 2010 and will
include projects at Chicontepec and possibly work involving the new refinery.
Poor Results So Far In Deepwater Wells
January 4, 2010
According to a report by Pemex, only 2 of the 12 deepwater wells it has drilled are deemed as viable in terms of
successful extraction of crude oil. Pemex invested nearly USD 760 million to develop the said wells.
New Director Appointed At Pemex Gas
January 4, 2010
Pemex announced that Jordi Herrera has been designated as the new head of Pemex Gas. Mr. Herrera is the former
Undersecretary of Energy Planning and Technological Development from the Ministry of Energy, and has been a
close aid to President Calderon in several posts.
Mitsui, Tokyo Gas To Acquire Five Natural Gas Companies In Mexico
January 6, 2010
Mitsui and Tokyo Gas will acquire five natural gas companies that have operations in Mexico for JPN 110 billion (USD
1.19 billion). The Japanese firms' holding company will acquire the natural gas companies as well as other
businesses, including a pipeline operator and power stations that have a combined capacity of 2,233 megawatts, from
Spain's Gas Natural.
CFE Raises Electric Tariffs By 4%
January 4, 2010
CFE announced a 4% increase in its rates for electricity, as well as monthly planned increases of 0.33%. The new
tariffs have been published on its website.
Industry Faces A 67% Increase In Gas Costs
January 8, 2010
The Energy Regulatory Commission announced that the reference price for natural gas for January will be USD 5.17
per million BTUs. This is a 67% hike in terms of the rate of last December and 49% higher than the annual average
for 2009.
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Mining
Mining Sector Accelerates Exports
January 8, 2010
Exploration and production of rare and strategic minerals, such as lithium, cobalt, titanium and components of coltan,
a superconductor, will significantly increase in the upcoming years. Such is the case for Canadian Black Fire,
currently exploring a titanium deposit in Chiapas which might render the largest deposit of its kind worldwide.
Vancouver-Based Riverside Resources Inc. Acquires Mexican Gold Project (RRI.V)
January 6, 2010
RRI announced that it had acquired the Tajitos Gold Project in Sonora, Mexico. Previous mining produced an estimated 50,000 ounces of high-grade gold from veins by producing more than 200,000 tons of ore. Recent drilling
by rival Penmont Mining Company intersected gold quartz veins and found mineralization extending beyond the veins
into the wall rock zones on ground now optioned by Riverside from a private claim owner.
Trade & Investment
Bolsa (BMV) Reaches Record High
January 7, 2010
The Mexican Stock Exchange's IPC index reached a new record high during the fourth day of trading of 2010 when it
climbed to 33,064 points, breaking the previous high which had been established on October 18, 2007.
Commercial Deficit At USD 195 Million
January 11, 2010
According to the National Statistics Institute, Mexico's trade deficit in November 2009 amounted to USD 195 million,
significantly better than in 2008 when the figure for the month had been USD 2.959 billion. The total commercial
deficit during the first 11 months of the year totals USD 4.431 billion.
Mexican Investments In Brazil Increase
January 4, 2010
Mexican investments in Brazil have grown 70.5% from 2006 to 2009, reaching a total of USD 17.4 billion, mainly in
the telecommunications and food industries, according to ProMexico.
Tariffs Imposed On Steel
January 5, 2010
The Ministry of Economy has imposed compensation duties on steel from China and the United Kingdom.
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Banking, Insurance & Finance
Banxico Will Maintain Its Autonomy But Will Seek To Coordinate With The Government
January 8, 2010
The newly appointed head of the Central Bank, Agustin Carstens, indicated that the Banco de Mexico will seek to
better coordinate with the federal government in order to support the economy, but emphasized the entity's autonomy
and pointed to the fact that decisions at Banxico are made by the Governance Board, where he holds one of five
votes.
Afores Reach A 5.6% Rate
January 8, 2010
According to the Mexican Stock Exchange and industry regulator Consar, Afores offered workers an annual real rate
of 5.6%, after discounting inflation and administrative commissions.
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Business & Industry
Herdez Obtains USD 47 Million In 10-Year Financing
January 6, 2010
Canned food manufacturer and distributor Grupo Herdez has obtained funding of MXN 600 million (USD 47.09
million) to replace short-term debt and for other corporate purposes.
Wal-Mart Mexico Reaches Expansion Goal Despite Crisis
January 6, 2010
Wal-Mart de Mexico, S.A.B. de C.V., announced that it opened 78 new stores nationwide in December, for a total of
275 for 2009, 5 more than projected. Wal-Mart de Mexico operates 1,410 retail outlets in Mexico, ranging from
discount stores, membership warehouse clubs, an apparel chain and restaurants. Wal-Mart also announced that its
same-store sales for 2009 increased 3.4% from the previous year.
Heineken To Buy Brewing Business From Femsa
January 11, 2010
Dutch brewer Heineken will acquire 100% of the business of the Mexican brewer Fomento Economico Mexicano
(Femsa) at a purchase price of $7.347 billion dollars, announced both companies. With the move Heineken will take a
significant position in the beer market in Mexico and Brazil. The transaction could be completed during the first half of 2010, and is subject to approval by the appropriate regulatory authorities and from shareholders.
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Housing, Real Estate & Mortgaging
Housing Sector To Grow Moderately In 2010
January 7, 2010
The housing sector projects moderate growth this year compared with 2009 as a result of a slight economic recovery
in Mexico while weakened public finances could limit support to the housing sector, which bases its growth in
government institutions such as Infonavit and Fovissste. Infonavit estimates that this year there will be a 10% decline
in revenue compared to its initial estimates because of lower wage earners registered with Instituto Mexicano del
Seguro Social (IMSS).
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Construction & Infrastructure
Consortium Led By ICA Is Awarded Panama Canal Contract
January 7, 2010
The Panama Canal Authority (ACP) awarded the fourth dry excavation contract to a consortium composed of Spanish
firm FCC, Mexican construction firm ICA and Costa Rica's Constructora Meco. The consortium submitted the lowest
bid of USD 268 million to carry out the work. The contract involves the development of a new access channel linking
the new Pacific locks with the Gaillard Cut, which is the canal's narrowest stretch, by carrying out 26 million cubic
meters of excavation, the installation of a backfilled cellular cofferdam water barrier and construction of an earth-rock
filled dam that will create part of the access channel's eastern bank.
Mexico To Build World's Largest Water Treatment Plant
January 8, 2010
Construction of the USD 710 million Atotonilco wastewater treatment plant in Mexico's Hidalgo state is scheduled to
begin by end-Q1, according to the National Water Authority (Conagua), which earlier this week signed a contract with
the consortium that was awarded the contract and includes infrastructure developer IDEAL, Spain's Acciona, Japan's
Atlatec (owned 85% by Mitsui and 15% by Toyo Engineering) and ICA. Local firm Desarrollo y Construcciones
Urbanas (Dycusa) and Green Gas Pioneer Crossing Energy, a subsidiary of U.S. firm Green Gas, also form part of
the consortium that will be responsible for operating the plant for the next 22 years. With an initial capacity to treat 23
cubic meters of wastewater per second, the plant is expected to treat 60% of wastewater produced in the Mexico
metropolitan valley area, which currently has one of the lowest coverage levels in the country, at 11.6%
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Telecommunications & Technology
Cofetel Opens Bidding Process For Spectrum
January 6, 2010
The Federal Telecommunications Commission (Cofetel) opened the bidding process for radio spectrum in the 1.7 and
1.9 GHz bands. Cofetel reported that the winners will be awarded converging titles, lasting 20 years. The auctioned
bands are ideal for mobile telephony and third-generation services comprising voice, data and video with the benefits
of Internet. The opportunity should attract new competitors into the mobile services market.
Telcel And Movistar Increase Prices By 4% And 5%
January 5, 2010
The two main mobile phone operators adjusted their prices due to VAT (1%) and special telecommunication tax (3%)
increases effective January 1, 2010.
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Economy
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Calderon Says Jobs, Poverty Now Top Priorities
January 7, 2010
Mexican President Felipe Calderon said Wednesday that jobs and reducing poverty will be his top two priorities in
2010, while the fight against drug cartels that dominated the first half of his presidency placed third. The President
promised historic levels of investment in infrastructure to create jobs as Mexico emerges from a deep economic
recession. Calderon listed "creating jobs" and "fighting extreme poverty" as the first and second objectives for 2010,
and reiterated that "2010 will be the year of economic recovery."
GDP Drops 7% In 2009
January 2, 2010
Although the country's economy grew 2.9% in the third quarter over the previous one, officials estimate Mexico's GDP
will fall about 7% in 2009. The country's Treasury Department says that it expects the economy will grow by around
3% in 2010. A government report published in July showed that extreme poverty in Mexico, defined as people who
cannot buy enough food, rose from 13.8 million in 2006 to 19.5 million in 2008, in a country of almost 107 million
inhabitants. A broader poverty definition, including families who could not meet housing, transport, education and
other normal costs, reached 50.6 million, up from 42.6 million in 2006.
States Experience 21.8% Reduction In Their Budget
January 6, 2010
Federal entities experienced a 21.8% drop in their budgets during the first 11 months of 2009, according to the
Ministry of Finance (SHCP). Up to 25 states have suffered shortfalls greater than 20% in their budgets, due to
reduction in oil prices, with Michoacan (-25.2%) and Puebla (-25%) as the most dire cases.
Border & Migration
Remittances Drop 14% In November
January 4, 2010
According to Mexico's central bank (Banxico), family remittances from the United States totaled USD 1.495 billion
during November 2009, a 14.44% reduction from the same month a year ago. However, this represents an increase,
as October's drop was 35.86% when compared to the same period in 2008.
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Politics
Electoral Horizon For 2010 Includes 12 State Governorships
January 4, 2010
During 2010, over 40% of voters will be called to vote in order to renew 12 governorships, as well as legislators in 15
states and in over 1,500 municipalities. Parties will seek to jockey into position and focus on entities with the highest
number of voters, such as Veracruz, Puebla, Chihuahua and Oaxaca, as they gear up for the 2012 presidential race.
OCDE Urges Government To Undertake Fiscal Reform
January 8, 2010
Jose Angel Gurría, Secretary General of the OCDE, called on all Mexican political actors to agree on a much-needed
fiscal reform. Mr. Gurría recalled how the initiative he championed as Finance Minister during the Zedillo
administration was foiled by the PAN, only to be followed by the PRI's impairment of the PAN's initiative during the Fox era.
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Justice, Safety & Crime
Some Say Biggest Drug Gang Has Been Least Hit
January 7, 2010
Some analysts indicate that although President Calderón insists that he is attacking all the gangs "forcefully, and,
without distinctions," the government's strategy is to focus on the weakest groups, so that the organized crime market
will consolidate itself around the Sinaloa cartel. However, officials insist that there is no going back to the old practice,
in which Mexican governments turned a blind eye to drug gangs, provided they acted discreetly. If Sinaloa has been
hit less hard, it is probably because it operates differently; it has stuck to a "transactional" rather than "territorial"
method. Other gangs, such as La Familia and the Zetas, a particularly violent outfit of former soldiers, began to
control cities and diversify into extortion and kidnapping. When the government deploys troops to reclaim the streets,
it is these gangs that they run into. Sinaloa, by contrast, has stuck to drugs and money laundering and is smarter and
more sophisticated, as it seems to prefers anonymity to the ostentation of others.
Mexico Reaches Record Number Of Murders In One Day
January 10, 2010
A record 69 people were murdered across Mexico on Saturday, making it the deadliest day since President Felipe
Calderon took office just over three years ago. The previous record was 57 murders on August 17, 2009. At least 26
people died Saturday in Ciudad Juarez, which is considered Mexico's most violent city, registering 2,635 murders last
year.
Mexican Human Rights Activist Killed In Ciudad Juarez
January 7, 2010
Josefina Reyes, who belonged to the National Front Against Repression, a rights group that mainly investigated
police and army abuses, was killed on January 3 in Ciudad Juarez, across the border from El Paso, Texas. The
National Human Rights Commission warned that the killing indicates "attacks against defenders of human rights are
on the rise."
Commando Kills Reporter In Coahuila
January 8, 2010
Reporter Valentín Valdes' tortured body was found yesterday with five gunshots and a message warning journalists
that "this will happen to those who do not understand, this message is for all of you." Valdes was kidnapped along
with another journalist, who was let go, on Thursday evening.
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Health & Science
Canada Lending Mexico 5 Million Swine Flu Doses
January 6, 2010
The Public Health Agency of Canada says Mexico placed orders with several manufacturers, but the bulk of Mexico's
order will only be available at the end of the month. Health Minister Leona Aglukkaq said that Mexico requested the
doses to help bridge that country's immediate pandemic vaccine requirements. Mexico will replenish Canada's supply by March 31.
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Other
Cold Weather Hits Mexico
January 10, 2010
A brutal cold wave has locked freezing temperatures in place across Mexico and is expected to extend over the next
36 hours, according to the Mexican National Meteorological Service (SMN). The SMN said temperatures below 5
degrees Celsius had been reported in 20 states of Mexico, with temperatures dropping to 11 degrees Celsius below
zero in regions of Durango and Chihuahua. It also said temperatures would plummet to 3 degrees Celsius below zero
in Ajusco Volcano, south of Mexico City. The government of Mexico City, which has issued an alert for the low
temperatures, has strengthened public shelters to take more homeless people. Local authorities in 7 states are
considering suspending school for the next three days.
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