16 October 2020

Key insights

Chile – Mining activity in Chile is steady, with no major operational closures or shutdowns. In particular, Chile's copper industry has largely avoided major impacts from COVID-19. Most mines have reduced staffing and operations numbers, but production numbers for the first half of 2020 were on par with 2019. Major miners expect to see production dip in the second half of this year as delayed maintenance work is commenced. Mexico.

Mexico – Existing concessions will not be revoked as a result of Mexico’s planned nationalisation of lithium mining. However, new licenses may be more strictly controlled, according to sources.

Mexico – Mexican authorities are creating a security team to protect mining companies from organised criminal gangs. In late September, the first 118 mine guards were deployed as a response to the apparent increase in crime resulting from the COVID-19 mining shutdown.

Market opportunities

Resources

Chile – The Chilean mining industry is highly receptive to new technology that increases productivity or enhances mine-worker safety. This creates opportunities for Australian METS and VET companies looking to diversity and expand. Austrade is working with several large mining groups to explore supply chain gaps that can be filled by Australian expertise.

Chile – There is also a growing trend in Chile towards using renewable energy solutions to support the mining sector, owing to increased power prices. The trend applies particularly to copper mining, whose ageing mines require more power to stay profitable. Usage of renewable energy in the copper industry is expected to growth from 10.5% to 49% over the next three years. This will create opportunities for Australian companies that have renewable and energy-efficient technologies that can be applied to mining.

Latin America – Operations in gold, lithium and copper mining continue to grow and there is a strong appetite for Australian mining technologies and solutions. The mining sector in Latin America represents a substantial growth and diversification opportunity for Australian METS companies.

Latin America – The imposition of new safety measures in mining operations across Latin America may present Australian METS companies with fresh opportunities.

Mexico – Given the forecast boom in demand from the electric vehicle (EV) market, lithium is viewed as a strategic mineral for Mexico, which could help fund public services. Bacanora Lithium and JV partner Ganfeng Lithium hold the 10 concessions that form the Sonora project. This is by far the largest and most advanced lithium asset in Mexico, and one of the biggest globally, with measured and indicated resources of around 5Mt of lithium carbonate equivalent. This could provide opportunities for Australian METS companies, including those with critical minerals expertise.

Mexico – According to Mexico’s Vice-Minister for Mining, the sector is on the cusp of a rebound, spurred on by a surge in metals prices. Prices for all the country’s key mining products – gold, silver, copper, zinc and lead – have risen in recent months, more than making up for steep falls at the start of the pandemic. Mining investment projects have not been suspended, and price recovery has made it easier to fund these projects. This increase in investment will create opportunities for Australian METS companies in Mexico — and those prospecting in the market.

Mexico – There is likely to be a decline in new mining approvals following recent policy changes. There is political tension within the mining industry, with issues such as tax disputes, a mining concessions freeze and a threat to nationalise the emerging lithium mining sector. There are still strong opportunities for METS companies in existing projects but the future pipeline may not be as strong.

Recycling

Mexico – The Federal Government is committed to tackling the country’s huge municipal solid waste (MSW) problem with the upcoming General Circular Economy Law. Analysts say that Congress will likely approve the final draft by the end of 2020. The law will create a non-existing circular economy industry, thus opening opportunities for Australian companies that can supply related equipment, technology or services.

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