Mining Industry to Spearhead Mexico’s RecoveryBy Marc Kieler | Tue, 04/14/2020 - 19:58
Mexico’s mining industry holds a privileged position for driving economic recovery and guaranteeing social well-being. It is unfortunate that governments and society, in general, do not understand that mining is essential for life as we have come to know it. Simply, we would still be in the Stone Age without it.
Tourism and oil are the two leading sectors that are undergoing major contractions, which will take them many years to recover. Mexico will not be able to fully reap the benefits of these two sectors, which have traditionally contributed significantly to the country's GDP. Mining, however, remains in a strong position. In times of crisis, when borders are closed and manufacturing ceases, essential natural resources maintain or even increase their value.
Mining has a rare opportunity to consolidate as the pillar of the Mexican economy. At present, it provides roughly 4 percent of the national GDP, valued at approximately US$41 billion per year. Given the current economic circumstances, this contribution is crucially necessary. Moreover, the percentage can increase. The mining industry is emerging from a deep and protracted downturn. Gold prices are currently at record levels. The present conditions will not last long. They should be taken full advantage of before the next downturn returns. The strong mining industry can propel Mexico up the value chain, setting the foundation of the cutting-edge medical, automobile, green energy and agriculture industries.
Furthermore, mining has the unique capacity to reach far-flung populations that tend to be excluded from economic development. There are hundreds of thousands of people in numerous towns and cities that rely on their local mine. Cananea, Fresnillo and Somberete are just a few prominent examples, but there are over 600 mining-oriented population centers all throughout Mexico. Subjecting mines to closure in an effort to prevent the spread of COVID-19 will not only be ineffective. It will also harm the well-being of the populations in these 600 mining towns and cities.
It is important to keep in mind that most miners have already implemented social distancing in their day-to-day activities. They wear extensive personal protection equipment. Also, most of mines operate far away from densely populated areas. This shelters miners from the outbreak hotspots that abound in large cities. Mining should not be compared to industries with high risk of spreading the virus, such as automotive plants, manufacturing and tourism.
It is understandable that many important decision-makers are in crisis mode and may not be aware of the abovementioned points. Responsibility falls to the industry itself. Miners must insist on the importance of the industry for Mexico’s development, especially in a crisis such as the current one. It is a fact that slowing down mining will directly slow down Mexico’s recovery. On the contrary, there is at present a rare opportunity for bolstering the Mexican mining industry and consolidating it into the pillar for future national prosperity.