Sonora Benefits From Rising Metal Prices

In 2020, Sonora's mining production decreased by eight percent due to the health crisis caused by the COVID-19 pandemic. However, records from 1H21 show that the state could have one of its best years in this decade, especially due to rising metal prices and production levels.

In April, gold production in Sonora registered an increase of 14.3 percent, copper 14.2 percent and silver 42 percent. The main factors that contributed to the increase in production levels in Sonora are the high prices of metals and the companies’ production rates that are reaching pre-pandemic levels, said Eduardo Portugal Prada, President of the Association of Miners of Sonora (AMSAC).

“Sonora is expected to benefit especially from copper prices, as it is reaching record levels. This year it has increased its value by 30.38 percent.” In 2019, Mexico produced 768,542 tons of copper, reporting an increase of 2.3 percent compared to the 751,00 5 tons produced in 2018. Currently, Sonora is Mexico's main copper producer boasting 83 percent of national production, so it is expected to benefit more than other states, reported CAMIMIEX. In addition, Sonora operates with the highest national and international standards to prevent COVID-19 contagions, for which mining companies are expected to continue operating throughout 2021, Portugal said.

Moreover, Sonora will receive a significant investment in 2021. Canadian investment will be US$321 million, which include the expansion of Agnico Eagle's La India mine and Álamos Gold's Mulatos mine. The Bacanora Lithium project will have an investment of US$100 million, while at a national level, Grupo México will invest US$850 million in its Buenavista de Zinc, El Pilar and Pilares projects, AMSAC reported.

In an interview with MBN, Craig Gibson, Technical Director of ProDeMin, explained that the recent surge in metal prices is reviving exploration, especially in the north of Mexico. “All the mining districts have been further developed, and in some parts, they remain unexplored in terms of modern exploration. Additionally, exploration is expanding into new areas for battery metals, such as lithium in Sonora and Zacatecas. The main opportunities are in northern Mexico in states like Sonora.”

In recent years, the mining sector in Sonora has been the most important in Mexico its production levels in minerals such as copper, molybdenum and non-metallic minerals such as graphite and wollastonite, place it as the main national producer. In addition,  it is the only producer of molybdenum, amorphous graphite and wollastonite in Mexico.