Mexico’s Mines Slow Down, Becoming Vulnerable to Crime
By Alejandro Ehrenberg | Journalist and Industry Analyst -
Thu, 04/16/2020 - 13:44
The Week in Mining highlights trends in the world’s mining industry. COVID-19 has disrupted the silver and copper markets, and increased prices are expected for both commodities. Mexico’s mining industry has raised its voice in order to make it clear that it is an essential part of the country’s economy. A headline-catching heist exposed Mexico’s poor security conditions and a fintech company helps formalize artisanal miners around the world.
Metal Prices
Due to the COVID-19 outbreak, it is estimated that approximately 50 percent of the world’s silver production is currently offline. That is without taking Mexico into account, whose mines have just begun ramping down operations in response to the pandemic. Mexico is the world’s top silver producer, accounting for roughly a quarter of global production. A silver supply crunch seems imminent.
The COVID-19 outbreak has rattled the copper market. Further turbulence is expected while the pandemic runs riot in the world’s economy. Analysts hope for a sustained increase in copper prices once stimulus measures in China and other major consumers start to kick in.
Mining is Essential
Industry leaders are speaking up to raise awareness of the key role that mining plays in Mexico’s economy. Marc Kieler, President of Hermosillo-based Globexplore Drilling, says “mining has a rare opportunity to consolidate as the pillar of the Mexican economy. The mining industry is emerging from a deep and protracted downturn. Gold prices are currently at record levels. The industry is in a position to expand its contribution to Mexico’s GDP.”
Mining is essential for manufacturing products that are in great demand due to the current health emergency. A case in point is Orbia, a fluorite producer, whose mine in San Luis Potosi is key in the supply chain of the most popular asthma inhalers in the world.
Security and ESG
Roughly 100 million people depend on artisanal mining compared to about 7 million people worldwide that work in industrial mining. Even though state and NGO-led efforts to formalize artisanal mining are key, private companies also have an important role to play. A case in point is GoldFinX, a fintech 2.0 company.
A group of armed men raided the Mulatos mine in Sonora, owned by Canadian gold producer Alamos Gold, stealing an undefined number of doré bars. Headline-catching events like the Mulatos heist are just the tip of the iceberg. Mexico’s suboptimal security conditions are a constant hindrance to miners doing business in the country.
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