Mexico Eyes USMCA to Reduce Mining Dependence on China

Mexico's mining sector is leveraging the 2026 USMCA review and the Mexico-US Action Plan on Critical Minerals to reduce structural dependence on China for mineral processing, positioning domestic production of lithium, silver, and copper within North American supply chains for automotive, electromobility, and advanced manufacturing industries. With a formal investment potential exceeding US$43 billion over six years and exploration activity down 11.5% in 2024, the sector faces both significant opportunity and structural barriers that will determine Mexico's ability to consolidate its role as a critical minerals supplier for the region.

Mexico's mining sector is positioning itself to reduce dependence on China for mineral processing and supply chains, with the USMCA framework and a bilateral cooperation agreement with the United States serving as the primary vehicles for that shift, according to industry and government officials.

Rafael Rebollar González, CEO, Peñoles, told Milenio that the Mexican mining industry, like those of other countries, has grown reliant on China's capacity to process mineral concentrates. He said Mexico is awaiting the outcome of USMCA negotiations to define its own vision and invest in regional development.

"We see geopolitical challenges and wars. Should we, or should we not, depend on Chinese supply? From a mining perspective, they have the capacity to absorb mineral concentrates from Mexican and other nations' mines for refining. China has integrated production chains to manufacture automobiles, batteries, wind turbines, solar cells, everything for the energy transition in the world, all in the hands of a single country," Rebollar said.

He framed the USMCA review as an opportunity to build a coalition of countries seeking to reduce that dependence. "I have no doubt that USMCA will result in greater regional development," he said, adding that Mexico intends to prioritize investment in technological development, mirroring the approach China has used to build refining capacity for more than 80% of the world's mineral requirements.

"We are going to see a more regional world that has to invest in developing certain capacities to depend on one or several regions, but not on any one specific one. That regional development is what can give us many investment opportunities in Mexico so that we stop importing and start producing what the country needs," Rebollar said.

He also warned against a model in which Mexico extracts minerals only to export them to China for processing, with finished goods later re-imported. "I think the worst outcome is extracting minerals in our country that have to be exported to China to be used in a production chain for a car, and then have the car sent back to Mexico. We see the automotive base installed in the country, which has taken 50 or 60 years to develop, and now imagine it being destroyed by the importation of Chinese automobiles," he said.

International Efforts

The broader policy framework backing this shift is already in motion. The Mexico-US Action Plan on Critical Minerals, announced Feb. 4, 2026, establishes a cooperation framework to reposition Mexico's mining sector within the North American industrial landscape, integrating domestic production into regional supply chains for electromobility, digitalization, and advanced manufacturing, according to CAMIMEX.

Luis Rosendo Gutiérrez, Deputy Minister for Foreign Trade, said the government's minerals agenda is being integrated directly into the USMCA framework to link resources. including lithium and silver, to the North American industrial ecosystem shared by Mexico, the United States, and Canada. 

"Minister of Economy Marcelo Ebrard has been working in Washington in recent weeks alongside Mexico's Foreign Ministry to secure a strategic agreement with the United States. Several plans and strategies will be developed to strengthen regional resilience in critical and rare minerals," US Trade Representative Jamieson Greer said.

Rebollar noted that the United States is moving with urgency, investing again in mining and metallurgy, building out smelting complexes, and taking equity stakes in some operations. He also highlighted advances in formalizing a critical minerals trade bloc involving more than 50 countries, including Mexico, aimed at reducing Chinese dependency. The United States already hosted a critical minerals summit in Washington in February.

Pedro Rivero, President, CAMIMEX, reinforced the strategic framing at the XXXVI International Mining Convention. "Fully recognizing mining within the USMCA as a key sector is not a corporate matter; it is a matter of economic security for the region," he said. Mexico is among the top producers of 23 minerals, nine of which are considered critical for North America.

CAMIMEX places the formal mining sector's investment potential at more than US$43 billion over the next six years, with direct impact on infrastructure and social welfare in more than 690 communities and approximately 3 million families. However, the chamber has flagged structural barriers, including the need for clear environmental and operational permitting timelines, a modernized legal framework, and stronger security protocols in remote mining regions.

Exploration is also a concern. Rubén del Pozo, President, Association of Mining Engineers, Metallurgists, and Geologists of Mexico, warned that mining exploration fell 11.5% in 2024. "We must not forget that mining is a sector of long maturation and high risk. It requires many years and millions of dollars before a project begins production," he said.

The 2026 USMCA review, governed by Art. 34.7, will require the three countries to decide whether to extend the agreement to 2042, maintain annual reviews, or allow it to expire in 2036. Experts caution that unresolved disputes could push negotiations into 2027, making early alignment between Mexico and Canada on dispute resolution, market access, and tariffs a priority ahead of the July 2026 Free Trade Commission meeting.