Copper Producers Continue to Invest in Mexico

As the copper demand is expected to grow in the long term due to the global green energy transition, mining companies are looking forward to increasing their production capacity by expanding existing mine sites or acquiring new projects. 

Copper producers in Mexico are looking to improve their production by developing key projects, most of which are carried out by foreign companies. Of these projects, five of them stand out as the most important: El Arco in Baja California Sur, La Verde in Michoacan and San Nicolas in Zacatecas, as well as El Pilar and Mina Pilares, both located in Sonora. 

Jointly, these five projects are expected to invest an initial CAPEX of over US$5.3 billion and have the potential to increase their production to 426,80t/y, which at the same time could support Mexico’s economic recovery

The El Arco project is the most significant development as it represents a CAPEX of US$2.9 billion. El Arco project is an open-pit copper project developed by the US-based Southern Copper, which considers the project as a world-class deposit with ore reserves of approximately 1.3 billion tons at average grades of 0.40 percent of copper. The company is currently conducting studies to then request an Environmental Impact Assessment (MIA). Southern Copper expects to start production by 2028. Nonetheless, the project’s future remains uncertain as the Ministry of Environment and Natural Resources declared that it would block future open-pit projects in the country. 

Solaris Resources is developing the La Verde project in Michoacan. The project, according to a 2018 Previously Economic Assessment (PEA) outlined a US$1.16 billion CAPEX for an open pit project that would produce 100,000t/y of copper with gold and silver as byproducts and a lifespan of 19 years. The project is not currently producing since it was placed on care and maintenance in 2016 and because the company is focused on projects in Ecuador. 

Teck Resources and Agnico Eagle joined efforts to develop the San Nicolas project with an estimated CAPEX of US$842 million, aiming to produce over 65,800t/y of copper and starting production by 2026. Both companies are focused on completing a feasibility study in early 2024 before making a construction decision. Agnico Eagle reported that in January 2022, the company started working on the feasibility study, permits and engagement with the surrounding communities. 

Southern Copper is also developing the El Pilar mine, which has an estimated CAPEX of US$310 million and is expected to produce 36,000t/y of copper. The project is expected to start by 2024 and has been reported to show adequate copper recoveries. 

Yet another project developed by Southern Copper is the Pilares mine, with a CAPEX of US$159 million. Production is set to start by 4Q22, and the project is expected to produce over 35,000t/y to be processed at the company’s la Caridad concentrator.