Insecurity Will Remain a Major Issue for Mexican Miners in 2022

Mexico’s competitiveness and investment attractiveness regarding the mining sector are in free fall, not only due to political uncertainty but also due to an increase in insecurity. Although the government has announced that it is stepping up efforts to address some of the county's major problems, experts do not believe the the panorama will improve any time soon.

According to the Fraser Institute's Investment Attraction Index, Mexico ranked 38th among 84 countries in 2019, 42nd in 2020 and 34th in 2021. Experts argue that the drop in investment has not only been due to changes in the laws and President López Obrador's position against mining, but also due to increased insecurity concerns. In both the 2020 and 2021 indexes, Mexico ranked 73rd out of 88 countries in the security section thus lowering the country’s score significantly.

Security issues are recurrent problems for miners. On Apr. 8, 2021, Alamos Gold’s Mulatos mine in Sonora was robbed. According to the company, an armed group entered the facilities, captured employees and stole silver and gold ingots using an airplane to escape. Similarly, on Nov. 16, 2021, a group of armed bandits entered Consolidated Zinc’s Plomosas mine and captured a security guard and employees. The group subsequently stole approximately 90 tons of zinc and lead concentrates worth US$90,000.

“My experience in the past 10 years in Mexico has allowed me to realize the country's potential, which is phenomenal. However, the main problems in the Mexican mining sector are the lack of security and political uncertainty,” Jorge Ramiro Monroy, CEO, Reyna Silver, told MBN.

According to figures from the federal government, from March 2021 to February 2022, 9,037 extortions were registered, which represents an increase of 16.8 percent compared to the same period last year. In addition, authorities warned that the incidence of extortion is expected to grow throughout 2022. Meanwhile, in the case of kidnappings, from February 2021 to February 2022, 627 cases were reported showing a year-on-year decrease of 18 percent. Despite the reduction in these incidences, mining experts assure that the decrease is not significant to no longer consider it a risk. “Extortion and kidnapping are crimes the mining industry has always been exposed to. We have had to know how to work despite them, but that does not mean that we accept the situation,” said Efraín Alva Niño, Director of the Extractive Industries Unit, Ministry of Economy.

Experts argue that even though the government has announced the creation of a special police to protect mining companies in some states, this will not solve the problem of insecurity. Also, with the country facing serious security issues in most states, experts say the outlook is unlikely to improve significantly any time soon.