Insight – Investment continues despite perceptions of uncertainty in Mexico
Perceptions of political uncertainty and community opposition continue to
weigh heavily on Mexico’s mining sector. However, in a recent roundtable on
mining in Mexico, co-hosted by Austrade and the Australia, New Zealand,
Mexico Chamber of Commerce & Industry (ANZMEX), Mexico’s Vice Minister
of Mining, Francisco Quiroga, outlined some very positive measures to help
make Mexico an even more attractive investment destination for miners.
Vice Minister Quiroga announced sweeping reforms to the current process of
issuing mining permits. This includes putting a freeze on new permit
applications and digitalising the current list of applications, which would
allow the administration to cut through the backlog of permits which have
never been used or have expired. These permits make up over 50% of all
permits held and have discouraged new applications.
Once freed up, the Mexican Government will be in a position to offer new
permits for projects which will actually be available for exploration. A
similar moratorium on issuing new leases was recently carried out in Chile
with great success.
In another sign that the new administration is opening up investment and
reassuring miners about community protests, President Andres Manuel Lopez
Obrador has pledged to crack down on corrupt demands from community
leaders. This reflects the AMLO Government’s renewed emphasis on community
and environment, which is the main driver pushing mining companies to
dramatically improve their sustainable mining practices, including
community engagement. In return, community leaders have been asked to
reciprocate with integrity and transparency.
Investment and new project pipeline
Despite some views on political uncertainty, Mexico still has a healthy
pipeline of mining projects that will come online in the next one to five
years. It is a testament to the resilience of the Mexican mining sector and
its untapped potential (70% of Mexican territory is yet to be explored).
Alongside this robust project pipeline, investment in Mexico’s mining
sector is also continuing to grow. For example, CAMIMEX, Mexico’s peak
mining body, sees the value of investments rising 7.4% this year to reach
US$5.26 billion. In 2018 alone, investment in mining grew 13.8%. CAMIMEX
predicts that the total investment in mining in the 2019–2024 period will
be US$26.4 billion.
Summary of project pipeline
Project |
Company |
Investment (US$m) |
Annual Production |
Initial production |
Tahuehueto |
Telson Resources |
20 |
16,000oz Au |
In production |
San Sebastian Extension |
Hecla Mining |
5 |
2.25Moz Ag, 15,000oz Au |
In production |
San Felix |
Mexus Gold-MarMar |
N/A |
N/A |
In production |
Pyrities Plant |
Fresnillo |
155 |
3.5Moz Ag, 13,000oz Au |
2020 |
Centauro extension Herradura |
Fresnillo |
110 |
36,000oz Au |
2022 |
El Compas |
Endeavour Silver |
10 |
11,488oz Au |
2019 |
Pyrites Leach plant |
Goldcorp |
420 |
120,000oz Au, 5Moz Ag |
2019 |
Capela |
Industrias Peñoles |
303 |
40,000t Zn, 4.7Moz Ag, 7,000t Cu, 8,600t Pb |
2020 |
Ciénaga optimization |
Fresnillo |
55 |
15,000oz Au, 1.3Moz Ag |
2019 |
Terronera |
Endeavour Silver |
69 |
3.2Moz Ag, 26,400oz Au |
2019 |
Pilares |
Southern Copper |
159 |
35,000t Cu |
2019 |
Pilares |
Southern Copper |
159 |
35,000t Cu |
2019 |
El Pilar |
Southern Copper |
310 |
35,000t Cu |
2019 |
fresnillo optimization |
Fresnillo |
30 |
3.0Moz Ag |
2019 |
Ana Paula |
Alio Gold |
137 |
116,000oz Au |
2020 |
Juanicipio |
Fresnillo + MAG Silver |
360 |
10Moz Ag, 30,000oz Au |
2020 |
Buenavista Zinc Concentrator |
Southern Copper |
413 |
80,000t Zn, 20,000t Cu |
2020 |
Sonora |
Bacanora Minerals |
420 |
35,000t Li |
2019 |
Orisyvo |
Fresnillo |
350 |
136,000oz Au |
2021 |
Herradura expansion, Centauro underground |
Fresnillo |
490 |
145,000oz Au |
2022 |
Media Luna |
Torex Gold |
482 |
170,000oz Au, 1.7Moz Ag, 21,000t Cu |
2023 |
El Arco |
Southern Copper |
2900 |
245,000t Cu |
2025 |
|
Total |
7,198 |
849,888oz Au, 34.6Moz Ag, 363,000t Cu, 120,000t Zn, 8,600t Pb, 35,000t Li |
|
Opportunities for Australian METS
These new projects, together with current mining operations, represent
significant opportunities for Australian METS companies, particularly those
with solutions for sustainable mining (environmental management, community
engagement and OHS), as well as technology, equipment and services to boost
productivity and lower operational and exploration costs.
The opportunities range across both the productivity and sustainability
verticals:
Productivity:
- Fuel efficiency (LNG, diesel, kerosene)
- Power consumption efficiency
- Equipment supply
- Education and training, including VET
- Risk management and OHS services
- Exploration efficiency
Sustainability
- Water management
- Community engagement
- Environmental protection services
- Mine closure and remediation
- Cyanide management
- Tailings management