Mexico’s Mining Production Continues to Grow

Mexico's mining production has continued an upward trend during 1H21, showing an increase of more than 9 percent compared to 1H20 records. Gold and zinc have seen the biggest increase in production and, according to experts, the market environment is expected to continue growing.

 According to data compiled by INEGI, Mexico’s mining production increased 9.2 percent during the 1H21, compared to the same period in 2020. The country’s mining production has grown steadily since January, when it fell 1.1 percent. The highest production volumes were recorded in May and April with 31.7 percent and 27.2, respectively.

Last month, mining production increased 0.8 percent compared to September 2020 records. The increase was caused by zinc and gold production, especially in July, where it increased 19.7 percent and gold 15 percent, respectively. In addition to zinc and gold, lead and iron pellets were the metals with the highest production, while the production of sulfur, copper, coal, gypsum, silver and fluorite decreased.

The states that have shown the highest annual growth in production in 2021 are Guerrero and Sonora in gold, while in iron are Colima and Durango and Zacatecas and Oaxaca get the silver. Recently, mining experts announced that the country is set to break its fifth consecutive year of falling gold production, as increased demand, new projects and higher prices for the yellow metal have caused gold production to 1H21 break the 2020 records. From January to July, the country produced 41.3 tons of gold, representing 31 percent more than the production during the same period in 2020, INEGI reported.

In regards to silver, analysts and shareholders are hopeful and optimistic that 2021 will be an even better year for its production, topping Mexico’s 2020 output of 5,541 tons. Though global production totaled at 25,516 tons, a 3.7 percent decrease from the previous year, Mexico’s potential is nevertheless boosted by growing demand and a healthier  market.

Last year, the pandemic and its impact on demand and logistics caused the global mining industry to contract by 3.3 percent, reported CAMIMEX. In addition, the Mexican mining sector was more affected because unlike other countries, the government decreed on March 23, 2020 the closure of non-essential economic activities, including mining.

 According to CAMIMEX, from 2019 to 2020, the country's participation in gold production decreased from 3.3 percent to 2.9 percent, in copper it contracted from 3.9 percent to 3.4 percent, in zinc from 5.5 percent to 5.2 and in lead from 5.5 percent to 5.3 percent.