Mining FDI Plummeted Between January and September 2022
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Mining FDI Plummeted Between January and September 2022

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Fernando Mares By Fernando Mares | Journalist & Industry Analyst - Wed, 11/23/2022 - 15:22

The Ministry of Economy (SE) reported that the mining sector experienced a sharp drop in the amount of foreign direct investment (FDI) it received between January and September 2022 compared with the same period in 2021. Industry insiders associated this drop with the uncertain environment created by the federal government. 

According to preliminary data from SE, Mexico received US$32.1 billion of FDI between January and September 2022, which is 29.5 percent more than the US$24.8 billion received during the same period of 2021. This overall increase was driven by the merger of Televisa and Univisión and the restructuring of Aeroméxico and marks the first time Mexico has reached the US$30 billion milestone since 2006. While the general outlook seems positive, the mining industry received the least amount of attention from foreign investors, receiving only 4.8 percent of the investment, which falls short compared to the 36 percent received by the manufacturing sector. 

Additionally, the mining sector reported a contraction in the investment received during this period. During the first 9 months of 2022, the mining sector received only US$1.5 billion of foreign investment, almost US$2 billion less than the amount received during the same period in 2021. 

Industry experts associate this decrease with an unstable international environment, marked by the war in Ukraine and rising inflation. However, there are domestic factors that play a major role in this decrease, too, like changes in the mining law.

Faysal Rodríguez, Vice President Mexico, Torex Gold, said it is true that some companies have decided to invest in other countries that are more proactive in fostering a mining-positive business environment, but there are also many committed to staying the course.

“There will be presidential elections in two years and investors prefer to wait for the presidential succession. What they invested stays, but they do not start new ventures,” said Julián Urióstegui, President, the Council of Industrial Chambers of Guerrero. 
 

Photo by:   PiggyBank

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