Mexican Mining Sector Attracts Significant Investment in 2022

The Mexican Mining Chamber (CAMIMEX) announced that mining companies will invest significantly in 2022, exceeding 2021's investment levels. However, 2022’s figure would still be far from the industry’s record figure in 2012 due to challenging conditions such as insecurity issues and new mining policies.

CAMIMEX reported that mining companies in Mexico plan to invest around US$5.5 billion in 2022, 15.2 percent more than the investment in 2021. However, the sector has not yet managed to come close to its record figure of US$8.04 billion in 2012. Experts argue that investment issues have not only been caused by inflation, as regulatory changes, the government’s opposition mining and increased insecurity concerns depress investor confidence further.

According to the Fraser Institute's Investment Attraction Index, Mexico ranked 38th among 84 countries in 2019, 42nd in 2020 and 34th in 2021. In both the 2020 and 2021 indexes, Mexico ranked 73rd out of 88 countries in the security section, lowering the country’s previous score significantly.

José Jaime Gutiérrez, President, CAMIMEX< lamented that the country's security situation has become a major disincentive for investment in the country. In Mexico, mining companies are under pressure from criminal gangs to pay bribes, while cartels attack their workers and service providers and steal vehicles. James Sinclair, Partner, Control Risks, told MBN that mining operations are vulnerable to organized crime and attacks because they are often located in remote areas. Furthermore, the value of the products they produce is high, making them an attractive target.

Regarding unfavorable policies, CAMIMEX has emphasized that the government’s position against mining is causing the country to miss out on opportunities valued at around US$25 billion. However, Adam Webb, Director of Mine Supply, Metals Focus, explained to MBN that the Mexican government's actions are not exclusive to Mexico but a reality in several Latin American countries. “The Mexican government’s policies obviously have an impact on the industry as they make Mexico less attractive from an international perspective. However, these are not only being implemented in Mexico, but also in other countries in the region such as Peru and Chile. However, I think that Mexico has numerous opportunities compared to other regions, especially in silver mining, so it will still be relevant."

Moreover, experts say that Mexican mining companies have a great opportunity to receive more foreign investment and grow their mining projects with metal prices on the rise following to geopolitical pressures. “Base metals and gold are facing an upward trend. Their prices remain healthy and are sure to perform well under current political strife in the Ukraine,” Ralph Shearing, CEO, Altaley Mining, told MBN.