Inside Mexico's Mining Ecosystem

The mining equipment sector is entering a period of rapid transformation. In 2024, global OEMs generated over US$66 billion in machine, parts, and service sales. Yet technological disruption, commodity market volatility, and geopolitical uncertainty are forcing manufacturers to rethink strategies. 

Rafael Sánchez, General Manager, Minera Camino Rojo, explained the importance of strong supplier relationships in navigating these challenges. “We understand the supplier value chain and the challenges it entails. Tariffs and regulations are constantly evolving, creating uncertainty. What truly unites suppliers and companies are shared objectives and KPIs, goals that both parties take ownership of. Often, we must anticipate needs for critical parts before they arise. A reliable supplier is like insurance: someone you can trust to deliver under any circumstance, ensuring continuity and stability.”

To remain competitive, OEMs operating in Mexico are investing heavily in technology. Battery-electric and hybrid equipment, smart mining systems, and digital solutions are central to growth strategies, though adoption remains gradual. “Our slogan is ‘passion for innovation.’ We are always developing new materials for new applications. We continuously create new solutions with the help of our chemists and engineers, staying one step ahead and anticipating future client challenges so they do not face them,” said Gerardo Guillén, Co-Founder of Elastómeros TAZA.

Manufacturers are also evolving their business models locally. Many have expanded aftermarket and service operations. Salvador García, COO of Starcore International Mines, emphasized the role of communication and trust in these models. “Communication and trust determine how the relationship with a supplier will develop. It depends on the company’s objectives, the supplier’s size, and their expectations. This relationship impacts productivity, efficiency, and profitability. Operations must remain open to innovation in this changing world, willing to try new products to reach goals more easily and efficiently.”

Despite these advances, Mexican mines face persistent challenges. Budget constraints affect equipment replacement and refurbishment plans, while skilled labor shortages continue to limit operational capacity. Rising costs for fuel, power, explosives, and other consumables, often exceeding 20–30%, add further pressure. Supply chain disruptions are also prompting firms to seek alternative suppliers, and volatile metal prices introduce additional financial uncertainty.

Amid these uncertainties, suppliers are adapting to strengthen local production and reduce reliance on imports. “The Trump tariffs taught us that nothing is certain; supply depends on more than just us. In five years, we reduced our reliance on Canadian imports, aiming to maximize national sourcing. Mexican companies do things well, so we look for reliable replacements while understanding their short, medium, and long-term needs,” René Valle, Director General, MacLean Engineering, explained.

Sánchez highlighted strategies developed by Camino Rojo during the pandemic to navigate uncertainty. “Camino Rojo was developed during the pandemic, so we know firsthand what uncertainty looks like. We implemented material-only contracts to secure supply and advanced payments to strengthen supplier commitment and minimize price fluctuations. Ultimately, the key to overcoming any challenge is human talent. Without cultivating skilled technical personnel, the industry cannot reach its full potential.”

García added that other proven models can also help companies adapt. “We work with multiple suppliers; the key is not to be tied to just one, so we do not depend entirely on a single source.” He also pointed to shared-risk contracts as an effective tool. “Everyone can win together, but everyone can also lose together. No one could have predicted extreme challenges like tariffs or gold reaching record highs. What matters most is the willingness to navigate these challenges together.”

Valle concluded that communication is the cornerstone of the supplier-client relationship. “The solution is simple: communication. Understanding mining needs is crucial because the most expensive spare part is the one you do not have. With tariffs and uncertainties, proper planning is essential. In addition to equipment, we provide specialized training and evaluate both the company and its team. Responsibility for equipment must be shared.”