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News Article

Despite Challenges, Mexico’s Mining Industry Grows

By Paloma Duran | Mon, 08/29/2022 - 17:24

The Mexican Mining Chamber (CAMIMEX) reported that the mining industry grew in 2021 even though its relationship with the federal government turned increasingly complicated. Although the sector's growth was celebrated, experts say it could be in an even better position if the Mexican government gave more incentives to mining companies and granted new concessions.

The mining sector grew 7.1 percent in 2021, proving to be the only productive activity that surpassed its slump in 2020, when the Mexican government classified it as a non-essential industry during the first wave of the COVID-19 pandemic. In addition, CAMIMEX President, Jaime Gutiérrez explained that due to an increase in metal prices, especially silver, gold and copper, the Mexican mining sector increased its contribution to the GDP, going from 2.3 percent in 2020 to 2.5 percent in 2021.

Gutiérrez celebrated that the mining industry managed to prosper despite the absence of tax incentives to invest more in the country, as well as the government’s refusal to grant new concessions and permits. Experts assured that Mexico could benefit much more from the market if the government promoted and supported mining.

“Mining retained its superior capacity for economic recovery in 2021. But to maintain a sustained growth, we need to improve the conditions for investment, support fiscal competitiveness, provide legal certainty and strengthen mining exploration. This is the basis for the development of this industry,” reported CAMIMEX.

Gutiérrez warned that the country continues to show a low yearly level of exploration investment. In 2021, the country’s exploration investment was 53 percent lower than that reported in the past nine years due to the government's negative stance on mining. In addition, 800 projects have been suspended, representing significant losses of investment and jobs that could otherwise benefit marginalized areas.

Industry analysts have said that the tension between the federal government and mining companies is mainly due to misinformation. For instance, President López Obrador has said that 60 percent of the country's territory is being used for mining and accused previous governments of delivering too many concessions without giving much thought to how they would be used.

However, according to CAMIMEX, in Mexico there are 24,066 concession titles representing 16.83 million hectares, equivalent to 8.59 percent of the national territory. In addition, production stage mines occupy less than 0.10 percent of the country's territory. Former President of CAMIMEX Fernando Alanis said the government deeply misunderstands the industry, since granting a concession does not mean the country hands over the resources to companies, but merely the possibility of exploring the land.

The data used in this article was sourced from:  
Photo by:   omid roshan
Paloma Duran Paloma Duran Journalist and Industry Analyst