Zinc Production Boosts Mexican Mining

Although mining production fell due to the pandemic, December 2020 showed positive numbers with zinc reaching its highest volumes in recent years, according to the INEGI.

Even with production suspensions that lasted at least two months and stringent sanitary restrictions, things are starting to look up for miners. Between December 2019 and December 2020, total mining production rose by 1 percent. Quite a feat, considering the very different working environments. With megaprojects looking to reactivate the industry and materials like lithium increasing their value, Mexican mining production may be on its way to recovery. 

A Good December

The 1 percent increase was mainly due to the increment in the production of zinc in December 2020, which by the end of the month had a monthly growth of 39.9 percent (40.801 tons) against November 2020, the highest month-on-month increase since September of 2015. Mexican zinc production is having a strong recovery thanks to the projects currently under development, such as Minera Capela from Industrias Peñoles and the continuation of the Saint Martin Mine operations, owned by Southern Copper. MBN also reported on the Buenavista zinc project located in Sonora, which is a massive US$413 million investment that is expected to start extracting in 2022.

The Peñasquito mine, owned by Newmont, also produced 100 million pounds of zinc in 4Q20 against the 79 million pounds it produced on the 4Q19, further aiding the industry, according to BNamericas and INEGI.

Coal production also helped the mining industry recover. In December alone, coal production increased by 21.4 percent, while lead surged by 11.2 percent. Fluorite also increased production by 5.9 percent, gold grew by 2.9 percent and plaster rose by 2.8 percent.

The Year 2020

When reviewing yearly results, zinc showed an increase of 11.5 percent, while lead had an increase of 7.7 percent and finally silver had a 3.3 percent increase, according to data from BNamericas. On the other hand, 2020 also showed expected yearly losses in materials like coking (metallurgical) coal, which experienced a 29.7 percent loss and iron pellets with a 16.7 percent loss. Sulfur reported a 6.1 percent loss and fluorite had a yearly loss of 5.8 percent.

Overall, 2020 was a difficult year for the mining industry and while there is some good news for the sector, uncertainty remains. The federal government is considering the possibility of nationalizing lithium, which could potentially harm the mining industry. The government is also restricting permits and concessions, which would limit exploration and production, as reported by MBN.