CAPEX & COMEX, page-63

He's a far left socialist and nationalising the mines is always a possibility with that kind of leadership

I don't think so. Andrés Manuel López Obrador, or AMLO who gets inaugurated on 1 December 2018 has talked about energy policy, and he will revisit all contracts to ensure they are fair and in the public interest. He isn't nationalising energy companies from what I can see. So if he isn't reversing industry policy on energy, I greatly doubt that he'd nationalise mines.

I'd say he's painfully aware of what happened in Venezuela and doesn't want a repetition in Mexico, which btw is a developed nation on many levels. Certainly the manufacturing base is very strong indeed. But he got elected on a platform of social and democratic reform and addressing corruption.

Overall he's trying to stabilise the country socially. He is keen to address the situation with recruitment of unemployed young people into organised crime and the pockets of lawlessness in the much vaunted in the US, but hopeless, war against drugs. To address this, he's talking about an amnesty in relation to certain crimes associated with this and also decriminalising certain drugs. He's trying to stabilise the nation, not destabilise it. IMO.

As a result he will be very focused on US relations and manufacturing and trade agreements. Trump wants to end NAFTA and AMLO will be intent on showing him what a disastrous move that will be. He's reputedly got a lot of personal charm so it's entirely possible he will make progress with the maverick Trump, who doesn't read nor take in information very well in briefings. Which can result in unexpected outcomes after face to face meetings.

AZS are well-placed because they have engaged with the previous Mexican government and employed qualified Mexicans. The change over with the administration will take many months to bed down, so nothing is absolutely certain. Just my view that the new government will not want to destroy and destabilise and the reasons why are worth exploring. This guy is in for 6 years and that's a long time and he has administrative experience with having been the Mayor of Mexico City. H as had to form coalitions and this is where some of the complexity is.

But I do think mining companies might find themselves paying royalties in the long term. This is not a colossal price to pay for doing business in such a mineral-rich country and probably a long overdue reform.

http://www.as-coa.org/articles/jp-morgan-podcast-ascoas-susan-segal-mexicos-presidential-election

This podcast was made before the election result, but the underlying issues are well explored.

See also

http://www.as-coa.org/articles/qa-eric-farnsworth-will-amlo-build-or-break-modern-mexico

and more recently

http://www.as-coa.org/articles/viewpoint-what-expect-amlos-meeting-white-house-top-brass