Perceptions of political uncertainty and community opposition continue to weigh heavily on Mexico’s mining sector. However, in a recent roundtable on mining in Mexico, co-hosted by Austrade and the Australia, New Zealand, Mexico Chamber of Commerce & Industry (ANZMEX), Mexico’s Vice Minister of Mining, Francisco Quiroga, outlined some very positive measures to help make Mexico an even more attractive investment destination for miners.
Vice Minister Quiroga announced sweeping reforms to the current process of issuing mining permits. This includes putting a freeze on new permit applications and digitalising the current list of applications, which would allow the administration to cut through the backlog of permits which have never been used or have expired. These permits make up over 50% of all permits held and have discouraged new applications.
Once freed up, the Mexican Government will be in a position to offer new permits for projects which will actually be available for exploration. A similar moratorium on issuing new leases was recently carried out in Chile with great success.
In another sign that the new administration is opening up investment and reassuring miners about community protests, President Andres Manuel Lopez Obrador has pledged to crack down on corrupt demands from community leaders. This reflects the AMLO Government’s renewed emphasis on community and environment, which is the main driver pushing mining companies to dramatically improve their sustainable mining practices, including community engagement. In return, community leaders have been asked to reciprocate with integrity and transparency.
Investment and new project pipeline
Despite some views on political uncertainty, Mexico still has a healthy pipeline of mining projects that will come online in the next one to five years. It is a testament to the resilience of the Mexican mining sector and its untapped potential (70% of Mexican territory is yet to be explored).
Alongside this robust project pipeline, investment in Mexico’s mining sector is also continuing to grow. For example, CAMIMEX, Mexico’s peak mining body, sees the value of investments rising 7.4% this year to reach US$5.26 billion. In 2018 alone, investment in mining grew 13.8%. CAMIMEX predicts that the total investment in mining in the 2019–2024 period will be US$26.4 billion.
Summary of project pipeline
| Project | Company | Investment (US$m) | Annual Production | Initial production |
|---|---|---|---|---|
| Tahuehueto | Telson Resources | 20 | 16,000oz Au | In production |
| San Sebastian Extension | Hecla Mining | 5 | 2.25Moz Ag, 15,000oz Au | In production |
| San Felix | Mexus Gold-MarMar | N/A | N/A | In production |
| Pyrities Plant | Fresnillo | 155 | 3.5Moz Ag, 13,000oz Au | 2020 |
| Centauro extension Herradura | Fresnillo | 110 | 36,000oz Au | 2022 |
| El Compas | Endeavour Silver | 10 | 11,488oz Au | 2019 |
| Pyrites Leach plant | Goldcorp | 420 | 120,000oz Au, 5Moz Ag | 2019 |
| Capela | Industrias Peñoles | 303 | 40,000t Zn, 4.7Moz Ag, 7,000t Cu, 8,600t Pb | 2020 |
| Ciénaga optimization | Fresnillo | 55 | 15,000oz Au, 1.3Moz Ag | 2019 |
| Terronera | Endeavour Silver | 69 | 3.2Moz Ag, 26,400oz Au | 2019 |
| Pilares | Southern Copper | 159 | 35,000t Cu | 2019 |
| Pilares | Southern Copper | 159 | 35,000t Cu | 2019 |
| El Pilar | Southern Copper | 310 | 35,000t Cu | 2019 |
| fresnillo optimization | Fresnillo | 30 | 3.0Moz Ag | 2019 |
| Ana Paula | Alio Gold | 137 | 116,000oz Au | 2020 |
| Juanicipio | Fresnillo + MAG Silver | 360 | 10Moz Ag, 30,000oz Au | 2020 |
| Buenavista Zinc Concentrator | Southern Copper | 413 | 80,000t Zn, 20,000t Cu | 2020 |
| Sonora | Bacanora Minerals | 420 | 35,000t Li | 2019 |
| Orisyvo | Fresnillo | 350 | 136,000oz Au | 2021 |
| Herradura expansion, Centauro underground | Fresnillo | 490 | 145,000oz Au | 2022 |
| Media Luna | Torex Gold | 482 | 170,000oz Au, 1.7Moz Ag, 21,000t Cu | 2023 |
| El Arco | Southern Copper | 2900 | 245,000t Cu | 2025 |
| Total | 7,198 | 849,888oz Au, 34.6Moz Ag, 363,000t Cu, 120,000t Zn, 8,600t Pb, 35,000t Li |
Opportunities for Australian METS
These new projects, together with current mining operations, represent significant opportunities for Australian METS companies, particularly those with solutions for sustainable mining (environmental management, community engagement and OHS), as well as technology, equipment and services to boost productivity and lower operational and exploration costs.
The opportunities range across both the productivity and sustainability verticals:
Productivity:
- Fuel efficiency (LNG, diesel, kerosene)
- Power consumption efficiency
- Equipment supply
- Education and training, including VET
- Risk management and OHS services
- Exploration efficiency
Sustainability
- Water management
- Community engagement
- Environmental protection services
- Mine closure and remediation
- Cyanide management
- Tailings management
