Mining to Mexico
Trends and opportunities
Investment in Mexico’s mining sector currently ranks fifth in the world
after Canada, Australia, the United States and Chile. While Mexico has a
long history of mining in silver, gold and copper, it has only recently
appeared on Australia’s radar.
Mining is an important revenue generator in Mexico, contributing 8.3% of
industrial GDP and 2.5% of national GDP. It is also a major job provider.
In 2017, the sector supported 370,000 jobs directly and over 1.7 million
jobs indirectly. (Source: CAMIMEX Annual Report 2019)
Mexico’s mining industry is undergoing significant restructuring. The
previous Peña-Nieto government introduced specific tax and fee reforms,
increasing fiscal pressure on mining concession owners, exploration
companies and mine operators. The new leftist president, Andrés Manuel
López Obrador (AMLO) is looking to improve security in the sector, increase
infrastructure spending and expand broadband coverage to remote mining
areas. (Source: Business Monitor International (BMI), Mexico Mining Report
2018, January 2019)
The value of the Mexican mining sector is forecast to grow over the next
few years, supported by low operating costs and a strong project pipeline.
It is estimated to increase from US$16.9 billion in 2018 to US$18.7 billion
by 2026, averaging 2.8% annual growth. (Source: Business Monitor International (BMI), Mexico Mining Report
2018, January 2019
- The world's largest producer of silver, with the states of Zacatecas,
Durango and Chihuahua serving as the main production centres
The world’s ninth-largest producer of gold
The world’s seventh-largest producer of copper
- One of the top five producers of sodium sulphide, fluorite, celestite and
A large coal producer, with an overall production of 7.28 million tons
- The world’s second-largest fluorspar producer, with a calculated reserve
of 32,000 tons
The world’s eighth-largest producer of graphite, with a calculated
reserve of 3,100 tons
The world’s second-largest producer of strontium, with a total of 56,500
tons produced in 2016.
(Source: Mexican Mining Chamber (CAMIMEX) 2017, January 2019
Around 70% of Mexico contains outstanding geological potential for mining,
according to experts. Mexico is the world’s fourth-largest foreign direct
investment (FDI) destination for mining, and the number one FDI destination
in Latin America. (Source: ProMexico, Mexico´s Mining potential, 2016)
In 2017, the Mexican Central Bank (Banxico) reported that the country’s
mining sector attracted US$1.02 billion in FDI. Most investments came from
companies in Spain, Germany, Israel, the United States and Canada and
focused on gold, copper, zinc and uranium. Companies such as Goldcorp,
Fresnillo PLC, Agnico Eagle and Alamos Gold together produce over 100,000
tons of gold annually. Total mining investments grew in 2017, increasing by
14.7% to reach US$4.3 billion. Investment was expected to grow a further
22% in 2018, to reach US$5.26 billion.
Mexico provided one-fifth of the world's production of silver (4 million
tons) in 2017, mined by companies including Fresnillo, Goldcorp and Coeur
D'Alene. Copper production amounted to 463,000 tons, produced mainly by
Grupo Mexico, Cobre del Mayo and Capstone.
Mexico's copper production will increase over the coming years, supported
by a solid project pipeline and rising copper prices. (Source: BMI 2018 mining report)
While Mexico's total copper production declined by 4% year-on-year to 183kt
in the first quarter of 2018, the long-term outlook remains positive.
Mexico’s copper output is forecast to increase from 766kt in 2018 to 929kt
In February 2018, workers at Grupo Mexico's San Martin mine voted to
restart the mine, which had been stalled since 2007. The firm plans to
spend US$77 million to resume operations by the first quarter of 2019,
adding an annual 7.5kt of copper to the group's output. Grupo Mexico also
expects the Pilares project to begin operating in 2019, producing 35kt of
Major domestic miner Industrias Peñoles continues to develop the US$303
million Rey de Plata polymetallic project, with commissioning expected to
begin in 2019. In the firm's first quarter 2018 report, Teck Resources
outlined the drilling programme at the San Nicolas copper-zinc project. The
firm will complete the prefeasibility study in H2 2019 and has allocated
US$30 million for the project.
(Source: Business Monitor International (BMI), Mexico Mining Report
2018, January 2019).
Key Copper Projects in Mexico:
Alacran – Azure Minerals
Promontorio – Azure Minerals
Pilares – Southern Copper Corp.
- Tayahua – Minera Frisco SAB de CV
- San Nicolas – Teck Resources
- La Verde – Equinox Gold/Teck Resources
- Los Verdes - Minera Alamos
Mexico's silver production is set to continue its solid growth, supported
by vast reserves and strong project pipeline. The export-oriented sector
will also benefit from growing demand from Asia.
BMI forecasts Mexico's silver production will increase from 188 moz in 2018
to 261 moz by 2027, averaging 3.8% annual growth. Mexico will remain the
top global silver producer (it accounted for 22.4% of output in 2017). As a
result, junior and major miners showing increasing interest in the sector.
Top domestic silver miner Fresnillo will ramp up spending over the coming
years to support projects including the San Julian silver mine expansion
and near-term growth projects at the Fresnillo and Herradura mines. In the
first quarter of 2018, the firm recorded a 14% year-on-year
increase in silver production, up to 14.2 moz. In 2018, Fresnillo
maintained a production guidance of 67-70 moz.
In the first quarter of 2018, Pan American Silver reported a slight
increase in silver production in its Mexican mines, up to 2.9 moz. The
firm's expansion at the Dolores mine is on track, with the new underground
mine expected to achieve rates of 1,500 tons per day by the end of 2018. In
December 2017, junior miner Americas Silver Corp began commercial
production at the San Rafael silver mine.
(Source: Business Monitor International (BMI), Mexico Mining Report
2018, January 2019).
Mexico's stable business environment and relatively stable macroeconomic
outlook will drive metals demand and support the competitiveness of the
country's mining sector in the coming years. Mexico’s close proximity to
the United States and Canada gives it a significant supply advantage. The
USA remains a net importer of numerous mineral commodities from Mexico.
Mexico’s large reserves of precious metals, particularly silver and gold,
will attract investment. It also has significant deposits of zinc.
Mexico's regulatory landscape is generally favourable to mining, largely
focusing on precious metals and, increasingly, copper. The sector's main
pull back is the country's royalties regime, which came into effect in
January 2014. Royalties range from 7.5% for base metals to 8% for precious
metals. While the royalties scheme is amongst the highest in the region,
comparatively the country's overall tax burden is not high.
Mexico has not traditionally been a destination for Australian mining
companies. However, the country has strong fundamentals that make it both
competitive and attractive. To date, 15 Australian mining equipment,
technology and services (METS) companies and two mining operators (Azure
Minerals and Consolidated Zinc) have established a presence in the market.
Many other Australian companies are regular exporters to the market.
The Australian METS presence has developed swiftly in recent years. This is
likely a result of tempered demand elsewhere but also a reflection of the
globally significant opportunities in Mexico – a fact that has not escaped
Australia’s major mining competitors such as Canada.
Australian companies wishing to investigate and build opportunities in the
market should consider the key themes that are driving decision making in
Mexico’s mining sector.
Productivity: the current business environment is pushing organisations
to become low-cost producers by driving operational efficiencies,
optimising productivity and reducing costs.
Innovation: strongly linked with productivity, the introduction of
innovation in the industry is seen as key to making the industry more
cash-effective and resilient to downturns.
Education: there is demand for skilled workers with specialised
knowledge and experience in areas related to extraction of resources,
but Mexico is not producing enough human capital to satisfy this
Environment: as the public is becoming more aware of the environmental
impacts of the mining industry, the sector is under greater pressure
than ever to comply with international practices around mine planning
and operations, treatment and management of waste and energy
Community: new approaches to community engagement are needed to ensure
that mining operators provide jobs, infrastructure and services to
communities and pay fairly for the use of land while maintaining their
(Source: PwC MX,
Retos de la Industria Minera
Mining Company Profile
Read a customer profile on Grupo Bal (PDF).
The mining industry in Mexico is highly competitive, with over 500
companies holding roughly 25,000 concessions, however, the market is mainly
dominated by large firms. These account for an astounding 97% of main
metals’ total output (gold, silver, copper, zinc and lead) and tend to
dominate the most profitable niches, such as precious metals. Cumulatively,
investment has risen sharply over the past decade and it currently hovers
around US$5 billion per year.
Mexico remains one of the world's premier mine development locations in
respect to the time frames required for new operations. Mexico was the only
A-rated jurisdiction from Central American/Caribbean, according to the 2018
Investment Risk Index within the Mining Journal
World Risk Report
(feat. MineHutte ratings). (Source: Mining Journal, November 2018, January 2019)
Approximately 40 per cent of Canadian investment in Mexico is tied up in
the sector, while almost 70 per cent of foreign mining companies operating
in the country have Canadian interests. There are currently over 205
companies with Canadian capital established in Mexico.
The country’s geological potential is still growing, attracting more than
280 national and foreign companies to start new exploration projects,
mainly in the northern states of Sonora, Zacatecas and Chihuahua. According
to the General Direction of Mining Development, there are currently 347
mining projects in the country.(Source: Integral System on Mining Economy (SINEM))
in exploration phase, accounting for
11% are in pre-production phase and 16.6% of the projects have
not been given the development and construction green light, given current
commodity prices and the economic environment. In 2015 a reduced number of
projects started their production phase. (Source: CAMIMEX,
Informe Anual 2016, 15 February 2016
Mexico will remain one of the most attractive mining destinations in Latin
America due to its strategic geographic location, vast mineral reserves,
limited investment barriers and favourable regulatory landscape.
Tariffs, regulations and customs
Mexican import controls have significantly eased in recent years. Most
products no longer require prior import permits and import duties have also
been reduced. Duties are generally assessed based on the transaction value
of the products imported into Mexico.
Uncertainty over US policies towards Mexico has caused some disruption to
trade and investment over the medium term. Nevertheless, close economic
ties between the two countries will likely temper any significant barriers
to trade and FDI, and Mexico will remain an appealing location for
investment due to its broad industrial base, liberalising reforms in key
sectors and numerous free trade agreements (FTAs). Mexico scores 62.9 out
of 100 on the Economic Openness pillar of BMI's Trade and Investment Risk
Index, ranking second in Central and South America, behind Chile.
Mexico has more FTAs than any other country in the world — 12 FTAs with 46
countries — including NAFTA and FTAs with the European Union, European Free
Trade Area, Japan, Israel and 10 countries in Latin America. Additionally,
on 8 March 2018 the Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP), also known as TPP11 or TPP-11 was
signed. This trade agreement, which includes both signatories Mexico and
Australia, represents significant benefits for Australian METS providers.
These relate not only to the removal of tariffs on equipment and
technology, but also provide favourable conditions for Australian staff
members to enter the country for work reasons.
Mexico is also a member of the World Trade Organization (WTO), the
Asia-Pacific Economic Cooperation (APEC), the G-20, and the Organization
for Economic Cooperation and Development (OECD).
In order to export to Mexico, the government requires the importer to
re-label the products in Spanish and include the relevant information about
the contents and country of origin of the producer and information about
the import, port of entry, etc. All imported merchandise should meet
minimum sanitary and safety standards.
A wide variety of products must comply with the Mexican Standards of
Quality, referred to as Mexican Official Norms (NOM). Certain imports and
exports are subject to regulations by the Ministry of Environment and
Natural Resources (SEMARNAT). Some imported products must receive sanitary
or phytosanitary authorisations issued by the Ministry of Health. There are
also rules establishing the classification of goods whose importation is
subject to regulation by the Commission for the Control of Pesticides,
Fertilisers and Toxic Substances. (Source:
PWC, Doing Business in Mexico, January 2015
Essential customs information and procedures to consider:
Bill of lading
Commercial invoice with value breakdown
Import and broker licence
Specific requirements according to commodity code for goods.
Clearance process time depends on commodity code
The importer must be a registered person or legal entity.
Duties and taxes for formal entry clearance:
Duties depend on Harmonized Tariff Code
Broker fee - depends on shipment value
All commercial invoices must meet the following requirements:
Tax ID for the importer
Full goods description and Harmonized System Code (HS) - if shipment
origin is a Mercosur country it must include the Mercosur Common
Nomenclature number (NCM)
Merchandise unit cost, quantity and currency
Applicable incoterms used
Mexico Fact Sheet
, February 2015)
As tariffs and duty rates are subject to change without notice, Austrade
strongly recommends confirming these prior to selling to Mexico. For more
information, visit the
Service of Tax Administration
Marketing your products and services
The best approach depends on a variety of factors including the type of
business, the appetite for risk and funds available to the company.
Relationships are very important in Mexico and a local partner can provide
valuable connections and networks to decision makers. In many occasions the
decision makers both at corporate level and at mine operation level have a
limited knowledge of English. Being able to speak Spanish fluently or
having a Spanish-speaking local partner is important.
Australian manufacturers supplying to the mining sector may wish to
investigate setting up local manufacturing facilities. Many of Australia’s
largest manufacturers have a significant footprint in the country as a
result of its competitive cost structures and regional market access.
Austrade has also supported a small number of Australian companies in
setting up contract manufacturing in Mexico. Boston Consulting Group have
rated Mexico has having the third-lowest cost structure for manufacturing
across the top 25 exporting nations.
Some tips to keep in mind:
Setting up in Mexico sends a strong message to customers, signalling
commitment to the market and will often convert interest into a solid
Having a local presence through a subsidiary can help start a
relationship with your customer.
Given the focus on efficiency and productivity in the mining industry,
prepare a concrete value proposition which demonstrates clearly how
your solution has saved customers money in previous projects. Other
projects undertaken in Spanish speaking countries are especially
relevant as they indicate a capacity to work to common cultural and
It is helpful to mention if you have already done business with the
mining company you are targeting in other parts of the world.
It is important to consult both with headquarters and the mine site
while conducting business development. The mine sites and operations
team tend to be in remote locations across the country and headquarters
tend to be in Mexico City.
Face-to-face contact is crucial when trying to win business in Mexico.
Austrade recommends you attend or participate in the following list of
events and conferences of the mining industry. These are excellent ways to
meet customers, build relationships and gather first-hand intelligence.
Austrade manages the Australian presence at these events. There are also
many technical seminars and congresses in Mexico that are useful for market
intelligence and networking in specific sectors of the industry.
Mexico Mining Forum, 06 February 2019 in Mexico City, Mexico.
Mexico´s Biannual International Mining Conference (this year will be
held in Acapulco, Guerrero from 23-26 October 2019).
Community Engagement Forum, Hermosillo, Sonora – November 2019.
RIM Zacatecas 2020 in Zacatecas, Zac. Mexico (where Australia will be
the guest of honour in this event)
Links and industry contacts
Government, business and trade resources
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.
The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:
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