Mexico's Participation in Global Production FallsBy Paloma Duran | Wed, 09/15/2021 - 14:22
Due to the COVID-19 pandemic and the government’s decision to suspend mining activities for 2 months, Mexico lost participation in the global production of gold, copper, zinc and lead. However, it was able to maintain its position as the world's leading silver producer.
CAMIMEX explained that last year the pandemic and its impact on demand and logistics caused the global mining industry to contract by 3.3 percent. 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.
The sector represented by CAMIMEX exerted pressure on Mexican authorities for the reopening of mining activities and its relabeling as an essential economic activity, since all industries need mining products to continue operating. In addition, CAMIMEX demonstrated the high commitment the sector had with the well-being of its workers and communities by conducting a monthly census of COVID-19 cases detected in the industry and preparing a best practices guide, which was approved by the Undersecretariat of Mining.
After a two-month activity suspension, the mining industry was able to resume operations. However, its production, operations and profits have been affected. In addition, the Mexican mining sector was hit by the fall in all metal prices when China decreased its demand due to the suspension of its industrial activities from December 2019 to 1Q20.
Last year, gold was the main mineral produced by the Mexican mining industry, representing 31.2 percent of the national mining production. However, the volume of gold production registered a year-on-year fall of 2.3 percent equivalent to 71,704 kilos.
Following gold, copper and silver were the most produced minerals in Mexico, representing 23.5 percent and 19.3 percent of national production, respectively. In 2020, Mexico maintained its position as the world's leading silver producer and its 22.7 percent participation of world production remained unchanged despite the pandemic.
According to Global Data, after years of annual decline, world silver production is expected to increase 8.1 percent in 2021 to 918.3Moz and in 2024 to 1 billion oz, representing a 3.2 percent increase every year. Mexico, Peru and China will be the key producing countries, which together are expected to produce 393.9Moz in 2021 and 443.9Moz in 2024, reported MBN.
Experts believe that 2021 will be a better year for world production, as the recovery of several economies, the application of vaccines, the increase in metal prices and demand, especially for the use of green energy, have establish a better landscape for mining.