Mining Production Increases in January

INEGI reported that mining-metallurgical production increased significantly in January, despite experts’ warnings last year that the sector was at risk of stagnation due to weak demand in other key sectors, such as construction and steel.

Mining activities increased 4.5 percent at a monthly rate. Likewise, mining-metallurgical production grew 3.6 percent at an annual rate, driven mainly by the production of zinc, lead, gold, copper, silver, coke, non-coking coal, gypsum and fluorite. INEGI highlighted that zinc had a real annual variation of 6%, lead had 5.9%, gold 4.4%, copper 3.7%, silver 3.2%, coke 2.8%, non-coking coal 2.8%, gypsum 1% and fluorite 0.3%. Despite the promising increase, INEGI indicated that sulfur production had a 12.7% decrease, along with iron pellets (3.5%), in real annual variation.

Silver production is expected to play a key role this year worldwide, benefiting Mexico's mining sector. Recently, the Silver Institute announced that in 2023, mining production will increase by 5%, largely due to production in Mexico. Additionally, silver prices will benefit from higher demand and recession fears, increasing the purchase of silver as a traditional safe-haven investment.

The Institute announced that the expected production for 2023 is 1.055 billion oz. "Production from silver mines is expected to increase 5 percent in 2023, the highest level since 2016. This growth will come largely from new silver mines in Mexico increasing production, along with higher by-product production from Chile due to new gold operations with high silver content."

How Was Mining Production in 2022?

In 2022, the mining sector reported a slight decrease in production during a challenging and uncertain year. According to 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. The main decreasing variable was demand from the construction and steelmaking sectors, some of mining’s largest customers. 

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 production of liquid steel fell by 1.6%, totaling 18.2Mt, while 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. 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.