Jael Duran
Managing Director
Canadian Chamber of Commerce (CanChamMx)

Podcast

/
Expert Contributor

The Mining Sector: A Constant Pillar of the Mexican Economy

By Jael Duran | Mon, 08/29/2022 - 13:00

Mexico is a country with a long mining tradition. Since the pre-Spanish period, it has been discovered that the indigenous colonies that lived in our country “exploited” superficial deposits to carry out metallurgical work with gold, silver, copper, and some other blends. After the conquest of the territory by the Spanish, silver mining became the main economic activity of the “Nueva España.”

Today, Mexico continues to be one of the world’s largest producers of several essential minerals. For more than 10 consecutive years, Mexico has been the world’s leading producer of silver. In addition, it is also a major producer of 12 minerals, which are in high demand worldwide.

Regardless of our history and the importance that Mexico has in the mining world, it is almost never mentioned that the mining sector is essential for life, for the progress of human beings and for the economic development of Mexico. Unfortunately, there is a deep misconception about this industry, which must change. We must understand that the mining sector is present in our daily lives.

The Mexican mining sector is one of the central axes of economic activity. Over at least three-quarters of its territory, Mexico has the geological conditions that have allowed it to be an important player in the mining world; however, less than 10 percent of this territory has been explored due to the prejudiced rhetoric that has prevailed in the common domain.

Most people do not know that this sector is rapidly transforming. New regulations, advances in technology and ever-changing geopolitics continually push the field in new directions. In an environment that’s constantly being disrupted, the mining industry needs leaders who foster a positive attitude to change.

Currently, modern mining includes more and more technology in its processes, constant improvements in good administrative, environmental and community practices, as well as a greater diversity in its activities, increasing the workforce of women and the number of actions to include gender equity in their work programs.

It should be noted that the number of women employed in the mining sector in Mexico was 57,826 female workers at the end of 2020, 3 percent less than the previous year; however, female participation in total mining-metallurgical employment remained at 15.7 percent, matching the previous year, according to CAMIMEX.

In general, at the end of 2020, the mining sector reported a total of 367,935 workers. The remuneration received by those in the mining-metallurgical industry was 36 percent higher than the national average in Mexico.

In Mexico, there is still a great potential of mineral wealth to be explored. The country has a skilled workforce for mining jobs, with universities and higher institutions that produce excellent mining engineers, metallurgists and geologists, as well as businessmen and women who understand the industry and invest according to the cyclical circumstances of the mining sector.

According to the Mexican Ministry of Economy, the Mexican mining sector had a significant rebound in non-ferrous industrial metals, the value of mining-metallurgical production in Mexico went from MX$281.5 billion (US$14 billion) in 2020 to MX$338.2 billion (US$16.8 billion) in 2021.

The mining-metallurgical sector in our country represented 9.62 percent of industrial Gross Domestic Product (GDP) and 3.06 percent of National GDP, according to figures from the National Institute of Statistics and Geography (INEGI), in 2021.

To ensure that Mexican mining achieves sustainable development, in accordance with the needs of the country and in harmony with other objectives, such as environmental protection, the generation of formal and well-paid jobs and the tax contribution to public spending, it is essential to have public policies that take advantage of these competitive advantages and generate the conditions of stability and legal certainty that are required to channel national investments to the sector and attract investment from abroad.

The loss of competitiveness at the international level that Mexico has registered in the last four years is also reflected in terms of investments. Investments in exploration, a determining factor for the survival and growth of the industry in the medium and long term, have also been showing very worrying negative trends.

To this adverse economic environment, we could add the absence of the rule of law in matters of asset security of companies as well as in the legal procedures to be able to gain access to the surface lands necessary for the operation, which explains why investments in new projects have been declining substantially.

The mining sector requires a new approach in the public policies of the federal government, which guarantees and stimulates the sustainable development of the industry in conditions of international competitiveness.

We need to promote the image of the sector as a vital activity for the country, not only to the public but also within the federal government itself, creating awareness of the industry’s benefits and always remembering that the mining industry in Mexico is world class and much more inclusive than it was 20 years ago. The industry is changing for the better.

Photo by:   Jael Duran