Mexico Remains a Key Investment Destination for Canada

Despite the political uncertainty in the Mexican mining sector, Canada continues to view Mexico as a prime destination for exploration investment. Furthermore, although no more concessions are granted, companies are improving processes and equipment to continue getting more out of their current operation and finding new discoveries.

During the Inter.Mx Expansion Summit 2022, Enrique Zorrilla, President of the Canadian Chamber of Commerce in Mexico, highlighted that 35 percent of the country’s investments in Mexico are destined for the mining sector. This is because the country's deposits, geography and work culture make it an excellent destination for projects. "The nature of mining activity in Mexico encourages companies to continue allocating capital in exploration expenses. It forces [companies] to constantly invest and progress,” said Zorrilla.

Despite recent reforms to the Mining Law and the government's stance on concessions, the Mexican Mining Chamber (CAMIMEX) announced 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.

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."

Jaime Gutiérrez, President of CAMIMEX, said that despite the uncertain situation, companies in the sector are redirecting their efforts and investments to get the most out of their deposits, which allows the sector, production and investment to grow constantly. “Although we do not have new concessions, it is necessary to replace equipment, increase the capacity of our processing plants and improve our communication routes, among others. Companies are in dire need of this immediate investment to reaffirm their own operations,” Gutiérrez told Expansion.

S&P Global Market Intelligence reported that Latin America attracted 24 percent of global investment in 2021. Mexico gained US$600 million in mining exploration investment, ranking first in Latin America and fourth worldwide. According to the Chilean Copper Commission, of all investment in exploration in the region, Mexico captured 23 percent, followed by Chile with 21 percent, Peru with 16 percent, Brazil with 11 percent and Argentina with 8 percent.