Mining Production Fell in 2022
The mining sector reported a slight decrease in production during a challenging and uncertain year. The industry is struggling with low demand from the construction and steelmaking sectors, some of its largest customers.
According to the statistics agency INEGI, non-metallic and metallic mining production contracted by 0.6% annually in 2022, which according to experts is a sign of the sector’s stagnation.
In an interview with BNAmericas, José de la Cruz, Director General, the Institute for Industrial Development and Economic Growth (IDIC) said that mining production could decrease up to 0.7% due to the slowdown of large mining product-consumers like the construction sector and the steel industry. Other subsectors such as mining-related services grew by 13% compared to 2021.
According to INEGI, the construction industry ended 2022 showing signs of stagnation as it grew only 0.4% due to a 2.4% downturn in the residential subsector. Similarly, the National Steel Chamber (CANACERO) reported that the production of liquid steel fell by 1.6%, totaling 18.2Mt, and consumption decreased by 1.3% reaching 28.1Mt.
On Feb. 13, 2023, MBN reported that the foreign direct investment (FDI) attracted by the Mexican mining sector fell below expectations. According to the Ministry of Economy (SE), the sector registered US$1.6 billion in 2022, 66.5% lower than the US$4.8 billion registered in 2021.
Experts link the decrease in FDI with high inflation, global economic slowdown and the lack of new concessions in Mexico. “The non-granting of new concessions will bring the stagnation of the mining sector as a consequence, and today we are beginning to feel the effects of the absence of new mining projects. Of those that are operating in the country today, most are mine expansions and not new mines. This is generating serious repercussions," said Karen Flores, Director, CAMIMEX.
Despite the complex environment for both FDI and production, the mining sector continues to be an essential part of the Mexican economy as it is one of the world’s key producers of minerals like copper, silver and gold.