Mining Sector Thrives Globally; Mexico Faces Setbacks

The mining sector reported increased activity in October, supported by higher drilling results and financing levels, according to S&P Global Market Intelligence. The Pipeline Activity Index (PAI), which monitors industry trends, rose by 45% compared to September, reaching its highest level in a year, though it remained 4.9% below October 2023 levels. While the sector experienced growth globally, Mexico's ongoing halt of concessions continues to hinder activity.

S&P Global highlighted growth across key PAI components, including drill results, financings, and initial resource announcements. Junior and intermediate mining companies secured US$1.61 billion in October, quadrupling the September figure and achieving the highest total since March 2022. The gold sector drove much of this growth, with financing climbing to US$1.02 billion and the number of transactions rising from 101 to 177. Base and other metals financing also expanded, with funds raised increasing by 150% to US$411 million, led by a 260% increase in copper-related financings. Transactions valued above US$2 million rose from 39 in September to 97 in October.

Drilling activity advanced across all project stages, with the number of reporting companies increasing by 32% to 254. Early-stage, late-stage, and mine-site drilling all saw higher engagement. However, the total number of holes drilled fell by 19%, primarily due to reductions in gold and specialty metal drilling.

The Exploration Price Index (EPI), which tracks changes in metals prices, reached 219 in October, a record-setting figure and the fourth consecutive monthly increase. While gold prices reached new highs and other metals, including silver, platinum, zinc, and copper, posted gains, the aggregate market capitalization of listed mining companies declined 2% to US$2.38 trillion from US$2.43 trillion in September, reflecting mixed market dynamics.

Mexico’s Outlook

Mining production value contracted 1.3% in September 2024, INEGI data reveals. The decrease was highly driven by the mining-related services segment, which reported a 10.8% contraction when compared to August 2024.  

According to INEGI’s data for August 2024, gold production fell by 1.5% year-on-year, totaling 5,374kg. In contrast, silver production increased by 19.8%, reaching 317,532kg. Zinc production saw a significant rise of 91%, totaling 30,522t. Copper production, however, declined by 2.6%, reaching 42,274t, while lead production increased by 46.9%, totaling 12,069t.

CAMIMEX projects mining investment in Mexico to drop to US$3.8 billion by 2025, marking the lowest level in nearly a decade. Investment for 2024 is expected to reach around US$5 billion, similar to 2023's US$4.96 billion. Pedro Rivero, President, CAMIMEX, attributes the decline to a halt on new mining concessions since 2018. Exploration investment is also set to fall, from US$543 million in 2023 to US$500 million in 2024 and US$400 million in 2025, as reported by MBN.