Mexico’s Industry Ramps Up; Yearly Production Will Suffer
By Alejandro Ehrenberg | Journalist and Industry Analyst -
Thu, 06/04/2020 - 12:51
The Week in Mining stresses events in Mexico’s mining industry where roughly half of the sector’s workforce has resumed activities. The country’s mining production is expected to drop substantially as a result of shutdowns in March and April. Tentative signs of global recovery as quarantines are lifted have put pressure on precious metals and bolstered industrial metals like copper.
Mexico
About 50 percent of workers in Mexico’s mining industry resumed activities this week, after the government deemed the sector “essential.” The remaining 50 percent will gradually restart work in the coming weeks.
Operations at the Los Filos mine were suspended for several weeks in response to the COVID-19 outbreak. Notwithstanding the recent confirmation of 51 cases among its workers, who are now in quarantine, Los Filos is set to ramp up operations in June.
Mexico’s Mining Chamber declared that the country's sector may suffer a 17 percent drop in production this year due to the temporary halt of operations during the COVID-19 outbreak. Additionally, the sector's exports may decrease by around 10 percent.
PRI Deputy Carlos Pavón will propose that in the 2021 Federal Budget, the Mining Fund returns to its original objective: infrastructure works in mining-oriented municipalities to promote community development.
Metals
Copper fell to a four-year low last March, scraping the US$4,600/ton mark on the London Metal Exchange. Since then, the red metal has risen by roughly 17 percent. The main factor behind the increase is China’s ostensible recovery from COVID-19. However, a massive surpluss might be looming.
FxEmpire reports that “silver is pulling back following the release of the US ADP Employment Change report, which showed that the private sector lost 2.8 million jobs in May, less than the analyst consensus. This data provided additional optimism to the equity market and put pressure on safe haven assets like precious metals.”
India’s Economic Times notes that “gold prices ticked up on Thursday, after a rally in equity markets in the previous session on tentative signs of economic recovery as mandated shutdowns ease sparked the biggest daily fall in the metal since April 30.”
Trends
United Nations Sustainable Development Goal No. 7 proposes to ensure universal access to affordable, reliable, sustainable and modern energy. To reach that goal, global demand for minerals will rise enormously. Miners of key minerals will have to meet demand in a manner that is consistent with the spirit of the SDGs.
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