Mining FDI Hits Record High

In 1Q24, Mexico's mining FDI reached US$2.373 billion, the highest amount recorded for a quarter since 1944, reported Mineria en Linea. This marks a 187% increase compared to the US$828 million received during 1Q23, which was one of the lowest in recent history. According to the Ministry of Economy, of the US$2.373 billion attracted in FDI, US$2.466 billion was distributed in reinvestment of profits, a confidential amount in new investments and US$-85.2 million in intercompany accounts. Experts point out that this increase in FDI coincides with a significant rise in the price of gold to US$2,400/oz, which is 24% above the 2023 average.

The Ministry of Economy pointed out that since January 1999, Zacatecas has been the state that has received the most FDI in mining, with a total of US$9.355 billion. Historically, the countries that have contributed the most FDI to the Mexican mining sector are Canada with US$16.688 billion, the United States with US$7.263 billion and the United Kingdom with US$1.750 billion.

Mexico's Mining Sector Attractiveness

In 2019, Mexico ranked among the Top 10 producers of 17 minerals. In 2018, however, investment in the mining sector hit a 12-year low with international and national companies spending approximately US$343 million on exploration. According to CAMIMEX, the sector never recovered from the 2014 Tax Reform. Investment fell even further with Lopez Obrador’s administration, which has put the granting of new mining concessions on hold. In addition, the energy reform and the Mining Law have generated uncertainty for companies and investors in Mexico. 

Accumulated FDI in Mexico's mining sector from January 1999 to March 2024 has totaled US$48.359 billion. This includes US$21.674 billion in reinvested profits, US$17.735 billion in new investments, and US$8.951 billion in inter-company accounts. Mining production in 1Q24 reached MX$823.130 billion, representing a decline of 4.81% compared to 4Q23 and 5.52% compared to 1Q23.