Mexican Mining Sector Sees Growth Again After 12 Months

Mexico's non-petroleum mining sector experienced a 1.6% year-on-year growth in February 2024, marking its first positive growth in 12 months, reports data from INEGI. Growth comes amid a challenging period for the industry. INEGI data reveals that services related to mining, including those in the oil and gas sector, saw a significant decline of 12.7% during the period. Nevertheless, those not in the oil and gas related to mining saw a modest growth of 1.7% in 2023.

The mining sector faced a 2% contraction last year compared to 2022, primarily due to issues such as the prolonged crisis at Altos Hornos de México (AHMSA) and the temporary shutdown of Newmont’s Peñasquito gold and silver mine for over four months due to labor disputes.

The government's policy of freezing the issuance of new concessions has impacted both metallic and non-metallic sectors. Additionally, the uncertainty generated by the mining reform in May 2023, which gave the Geological Service (SGM) exclusive rights for exploration, has impacted the industry.

The lack of regulations for four amended laws applicable to the sector has stalled various mining processes, especially those related to exploration, affecting the demand for related services.

Despite these challenges, the mining industry has seen some benefits from rising commodity prices. The increasing prices of gold, silver, and copper have provided a boost to mining companies, even as they navigate the complex regulatory environment.