News Article

New Mining Undersecretary Stresses Importance of Cooperation

Wed, 02/08/2017 - 14:26

The tight markets of recent years will benefit Mexico’s mining sector because it forced miners to become more productive, more efficient and to filter projects to leave only the most promising, Mario Alfonso Cantú, Undersecretary of Mining at the Ministry of Economy, said at the start of the Mexico Mining Forum 2017 in Mexico City on Wednesday.

“Other factors like our supply of labor and the robust network of roads, rails, ports and airports mean that Mexico is an excellent market in which to invest,” said Cantú, speaking on Mexico’s position in the global mining landscape at the Hotel Sheraton Maria Isabel.

Cantú highlighted Mexico’s relationship of close cooperation with Canada during his presentation. Mining exports from Mexico represent US$412 million and imports represent US$695 million, which makes the relationship between Mexico and Canada extremely important, he said.

“Of the 271 foreign mining companies present in Mexico, 176 are Canadian,” Cantú said.  Especially in the global context of the coming years, he said this cooperation will be increasingly important, given concern over trade policies in North America.

Cantú explained the importance of national cooperation as well as international, and he said this was strengthened by the recent creation of the Guerrero mining cluster, which joins the several existing clusters in states like Zacatecas, Chihuahua and Durango. “This type of initiative is essential to boosting the sector and promoting production.”

The undersecretary went on to say that the World Bank estimates base metal prices in Mexico will increase by 11 percent in the next few years due to supply constraints and improved performance in advanced economies. However, precious metals prices are expected to contract by 7 percent due to higher interest rates and lower mining investment.

Cantú said, however, that Mexico is in a unique strategic position to capitalize on any mining investment. “In 2016, US$4.7 billion was invested in mining in Mexico, US$946 million of which was in new projects,” he said. This compares to 2015 figures of US$4.5 billion, US$663.1 million of which was allocated to new projects.

Moreover, 70 percent of Mexican territory has the geological conditions to support mining. “Only 27 percent of Mexican territory has been explored,” said the undersecretary. “And many of the country’s mines rank globally, including Goldcorp’s Peñasquito mine and Fresnillo’s mine of the same name in Zacatecas.”

New projects entered into production in 2016, including El Limon-Guajes in Guerrero, with an investment of US$800 million, which reinforced Torex Gold’s dedication to Mexico. “The first phase of Fresnillo’s San Julián mine also came online with a substantial investment and Grupo México’s Buenavista del Cobre expansion meant that copper production almost doubled in Mexico,” he said.

In 2017, more growth is expected, notably with Pan American Silver’s La Colorada project, in which the operator invested over US$160 million. Similarly, the Dolores mine is expected to see an investment of US$110 million.

Among other opportunities, the Mexican Geological Survey (SGM) will tender several projects over the coming months in states such as Sinaloa, Durango and Chihuahua, Cantú said. SGM has been increasingly active in issuing concessions. “In 2016, 668 concession titles were issued covering an area of 820,000ha,” he said.