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News Article

COVID-19 Halts Mining Industry

By Karen Herrera | Thu, 04/09/2020 - 16:43

On Monday, March 31, the Mexican government put the country in a state of health emergency, after reaching 1,000 people infected with COVID-19. After this declaration, President Andrés Manuel López Obrador decided to stop all non-essential activities throughout the country for at least one month to prevent COVID-19 from spreading exponentially. These exceptional measures included the mining industry, despite being an essential activity for the production of medical devices such as ventilators, X-ray materials, hospital beds or ICU units. In addition, the mining industry will key in the post-COVID-19 world, since much of Mexico’s industrial activity, such as auto parts production, infrastructure or the development of the oil and gas industry, depend on products from the mining industry. 

Mining accounts for 8.2 percent of Mexico’s industrial GDP and almost 3 percent of the national GDP and has been considered as a strategic industry for Mexico’s development. President López Obrador’s decision, however, has had a significant impact on mining companies listed on the Mexican Stock Exchange (BMV). The biggest blow to the mining companies came hours after the president’s announcement. Between March 31 and April 3, the fall of the main Mexican mining companies was significant. Minera Frisco, had the most significant drop, losing 7.3 percent of its value, followed by Grupo Mexico, which lost 6.3 percent, Industrias Peñoles with 5.6 percent and Autlan with 1.3 percent. 

Fernando Alanís, President of CAMIMEX, claims that it is a mistake to not classify mining as an essential activity because it economically affects thousands of workers and the 656 communities where it operates. According to Ismael Lejía, General Secretary of the National Democratic Mining Union, the suspension of all operations will affect the income of 2.6 million people who participate in this industry. 

Despite being aware of the situation, Hugo López-Gatell, Deputy Minister of Health, replied that people must also be aware that the country is experiencing an emergency due to COVID-19 and the spread of the virus could result in  the collapse of the national health system. Prevention is why mining operations need to stop. Meanwhile, Francisco Quiroga, Undersecretary of Mining, claimed mining activities are essential for the development of infrastructure in remote communities. 

 

The data used in this article was sourced from:  
El Financiero, 24 Horas, Mundo Minero
Karen Herrera Karen Herrera MBN Staff