Bright Future for the Mexican Mining IndustryWed, 02/07/2018 - 10:31
Mexico has much to offer the global mining industry, which is reflected in the rising amount of investment in the country after years of declines, said Mario Alfonso Cantú, Undersecretary of Mining at the Ministry of Economy, at Mexico Mining Forum 2018 on Wednesday in Mexico City.
“In 2017, Mexico saw an increase in exploration investment after four years of decreases,” said Cantú during his presentation, “State of the Industry and Policy Priorities,” at the Hotel Sheraton Maria Isabel. Investment in the Mexican mining sector rose to US$5.53 billion in 2017 from US$3.75 billion the previous year.
Cantú highlighted the importance of emerging economies to the global mining sector, stating that developing countries are gaining importance in the supply of minerals globally, as they have increased their production share to surpass developed economies, particularly the US and Europe. Mexico, added Cantú, has much to offer to investors, including economic stability in terms of inflation, which rose an average of 2.5 percent annually between 2013 and 2017. This has proven attractive for investment overall as the country received a total US$163 billion in FDI between 2013 and 2018. Furthermore, 70 percent of the country’s territory is geologically suitable for the development of mining projects.
The growing investment in Mexican mining is leading to positive results. “In 2017, a greater number of mining projects were identified in Mexico due to an increase in the number of exploration companies, with 57 percent of the investment heading toward gold and silver, followed by copper, polymetal ores and iron ore.
In 2017, Mexico remained the sixth-largest recipient of investment for exploration globally after Canada, Australia, US, Chile and Peru, according to S&P Market Intelligence. This position, however, is one place behind 2014’s fifth place. While Mexico is attractive, it is in fact becoming less competitive according to Institute Survey, but new policies concerning the sector are expected to turn this trend around, said Cantú.
The goal of these new policies is to streamline internal processes within the Ministry of Economy to facilitate investment in mining projects. “It is unacceptable that SAT can take up to a year to respond to tax queries from mining companies,” said Cantú. The ministry will also focus on negotiating polices to promote mining investment. For instance, it will sign an agreement with Sonora’s government on Feb. 14 to prioritize key matters to attract investment. Cantú concluded his presentation with a call to industry members to work together with the government to strengthen Mexico’s mining sector.