CAMIMEX: Projects on Halt, Promising Numbers on Gold Production

CAMIMEX, the Mexican Mining Chamber revealed that 754 out of 1,190 active mining projects funded by foreign capital in Mexico have been delayed or postponed. On the other hand, gold production in Mexico has seen a healthy recovery from both the pandemic and a five-year consecutive drop in production.

Even in the face of CAMIMEX´S recent announcement in regards to satisfactory and promising numbers for the mining industry, 6 out of every 10 projects have been placed on halt. The chamber reported that companies have not found the necessary conditions to carry them out. It was during their recent virtual press conference that CAMIMEX announced the results of their 2021 Annual Report stating that a total of 63 percent of the Mexican mining portfolio had been delayed. In sum, 307 are in the exploration phase, 78 in production, 43 are in development, and, finally, 8 have been cancelled. Though these projects are distributed across 26 states , only five of them concentrate the majority of them: Sonora, Chihuahua, Durango, Zacatecas, and Guerrero. In comparison to last year’s numbers, 2021 has seen a 44 percent growth in the aforementioned figure, when only 523 were reported as such.  

Despite these unflattering numbers, CAMIMEX also announced that they were increasing their gold investments to a staggering US$5 billion, a record high since 2013, in large part due to rising prices in gold and silver. In total, a 42 percent increase compared to 2020. High production levels are also to thank for this increase in investments. During 1H21, gold averaged a price of US$1807.1 per ounce, 9.7 percent higher than last year during the same period; silver grew 61 percent. CAMIMEX expects these levels to remain for the rest of the year, due to the persistent impacts of the pandemic and costs related to extraction. 

Fernando Alanís, President of CAMIMEX expressed regret that these promising numbers come from the negative effects of the third wave. “It is unfortunate to say that the price of gold and silver benefits from this situation, but we do foresee that due to the third wave their prices may still rise in a few months,” he said. He further added that the pandemic caused gold extraction levels in Mexico to soar and recover from a five-year drop, and from a historic contraction of 40 percent in 2019, coming from 2015 highs.

Mexico is positioned in the ninth place of gold production, tied with the Central Asian country of Uzbekistan; in silver production, it remains in first place. Gold production in 1H21 totaled 41,325 kilograms, a 30.9 percent increase from 1H20, per data released by INEGI.