Sonora Mining Outlook - First Look at MMF 2024 PDAC

This is a preview of what’s being discussed at Mexico Mining Forum 2024 PDAC. Don’t miss our upcoming interviews with panelists and guests to get more industry insights.

 

Sonora, a prominent mining state, has solidified its position as a national mining leader, accounting for over 30% of Mexico's total mining output, according to 2023 data. With projects nearing the production phase, the state's mining sector is poised to gain strength, opening up more opportunities for companies in the industry.

According to Margarita Vélez, Sonora’s Minister of Economy, the mining sector is a critical industry for the state, present in over 39 municipalities. In more than 23 of these, mining is the primary economic activity, accounting for 32% of the state's municipalities. Furthermore, the sector generates over 140,000 direct and indirect jobs in the state. This is due to the presence of more than 12,650 suppliers, 20 large and mid-scale mines, 133 exploration projects, and four smelting and refining plants. 

Sonora has a total of 6,142 mining concessions, with 1,693 currently canceled and the remaining 4,449 still active. Of the active concessions, 1,779 are being utilized, consisting of 1,423 under exploration and 356 designated as mining projects. The total land area covered by these concessions is 5,635,502ha, equivalent to 30% of the state’s territory.

The state currently operates 71 active mines that extract metallic and non-ferrous minerals. The local government emphasizes that although Sonora boasts significant geological potential, interest is primarily focused on four key minerals: gold, which accounts for 45% of interest; silver, with 36%; copper, with 12%; and zinc, with 6%.

According to Leonardo Taylor, Sonora’s Director of Mining, the state contributes 31.4% of Mexico's national production. The state leads in copper production, accounting for 75.6% of the national total, making it the largest copper producer in Mexico and the fifth-largest in the world. Sonora also ranks first in gold production in Mexico, contributing 25.7% of the national output. Additionally, it ranks second in barite production with 21.4% of the national volume, second in iron with 10.7%, and fifth in silver with 6.5%. 

The Sonora government asserts that the mining sector is crucial for embracing the energy transition. This commitment is reflected in Plan Sonora, which focuses on sustainable energy initiatives. One such initiative is the Puerto Peñasco Photovoltaic Power Plant, which will cover 2,000ha and generate 1GW of energy. Once operational, it will be the largest plant of its kind in Latin America and the fifth largest worldwide.

Acknowledging that clean energy projects are widely spread all over the world, the state’s government believes the participation of the mining sector will be essential as minerals like nickel, lithium, and cobalt have been labeled as critical minerals. Furthermore, transmission lines and electric vehicles (EVs) will require minerals like copper.

According to the Sonora government, challenges and opportunities in the mining sector include the need to strengthen regulation. There is also a call to intensify exploration efforts in line with international standards for sustainable mining. The state also calls for operating mineral deposits responsibly and sustainably, along with expanding exploration to include a broader range of critical minerals. Water consumption rationalization is a priority. Furthermore, there is a strong emphasis on developing a skilled workforce, supporting a conducive environment for investment, and streamlining permitting processes to assist projects through the necessary authorities.

Safety remains a top priority in Sonora, with the state hosting the largest presence of security agencies from all three levels of government. This provides an additional layer of security to complement existing municipal agencies. Sonora is home to 11 operational quarters of the National Guard, with 2,200 personnel, and 19 state police operation bases with over 3,500 officers. Additionally, the Mexican Navy recently opened a new complex at the Libertad Port, further enhancing security efforts in the region.