Mexico - Country Commercial Guide
Mining and Minerals

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-09-02

Mexico’s rich mining industry is among the top leading-prospect industry sectors for U.S. companies. This section provides a market overview and trade data.

Overview

This report considers statistics prepared by Mexico’s National Institute of Statistics and Geography (Instituto Nacional de Estadística y Geografía or INEGI), tracking production in four distinct mining categories: precious metals, non-ferrous, metallurgy, and non-metals. Statistics of machinery imports are gathered from the U.S. Office of Trade and Economic Analysis (OTEA), Industry and Analysis, International Trade Administration, U.S. Department of Commerce.

Mexico is a large exporter of mining minerals and ores with a trade balance in surplus by USD 12.25 billion in 2020. The sector’s imports have also grown over 10 percent annually since 2017. Mexican exports of minerals and ores totaled USD 15.6 billion in 2020. Mexico’s total exports of mineral ores have been growing steadily at 5.8 percent since 2017.

The COVID-19 pandemic in 2020 temporarily affected Mexico’s mining industry with a mandatory shutdown of operations. While the Government of Mexico allowed only essential industries to continue operating during the pandemic, mining was not included until later in the year. Despite that, Mexico’s mining production in 2020 was 6 percent higher than the previous year, reaching USD 13.5 billion. The industry’s average growth rate has been 1.38 percent since 2017. Half of Mexico’s mining production is dedicated to the extraction of precious metals, 36 percent to non-ferrous, 7 percent to metallurgy products, and the remaining 6 percent to non-metal ores.

For the United States, Mexico’s mining sector represented a USD 1.25 billion market by the end of 2020. Mexican imports of U.S. minerals and ores dropped 21 percent in 2020, compared to the previous year. While COVID-19 may have played a role in this drop, Mexican imports of mined materials from the U.S., have been falling since 2016. Despite this, Mexico imports about 51 percent of its mineral demand from the United States. In 2020, 83.8 percent of Mexico’s total imports from the U.S. were metal ores, and 13.5 percent were imports of non-metallic ores.

Mexico is the world’s leading producer of silver, and it is also a major producer of 12 minerals, three of which are in high demand in the United States: fluorspar, graphite, and strontium. Mexico is also an important producer of coal, intended predominantly for domestic use, but insufficient to satisfy the volume demanded by the power, metallurgy, cement, and chemical industries. Mexico is keen to explore new coal deposits as it plans to reduce its imports of this commodity. 

Investment in Mexico’s mining industry has slowed as the current López Obrador Administration has placed the issuance of new mining concessions on hold. Some mining companies in Mexico with permits received during previous administrations have decided to wait, hoping for better tax and exploration fees. Mexico is analyzing strategies to increase the production of lithium and exploitation of the vast deposits found in Sonora. Thirty-two U.S. companies currently operate in Mexico’s mining sector, with Newmont and Coeur Mining leading the list.

Mexico Mining Production and Market Size 
(Figures in USD billions) 

 

2017 

2018 

2019 

2020

2021** 

Total Local Production 

12.78 

12.57

12.69

13.50

13.50

Total Exports 

12.43 

13.05

13.42

15.61

15.61

Total Imports 

2.25 

3.06

3.20

3.36

3.36

Imports from the U.S. 

1.56

1.75

2.18

1.71

1.79

Total Market Size* 

2.60

2.58 

2.47 

1.25

1.25

Exchange Rates 

18.91

19.23

19.26

20.00

21.00

Total market size = (total local production + imports) – exports 
*2021 estimate of market growth of 5 percent, per IMF forecast 
Source: INEGI, OTEA

Leading Sub-Sectors

The following have been identified as the top sub-sectors in the mining industry with potential for sales of U.S. minerals, machinery, tools, technology, and professional services.

Metallurgy

Grupo Mexico, Met-Mex Peñoles, and Fresnillo PLC are the three main mining producers in Mexico, accounting for 82 percent of market value. They are Mexico’s largest producers of metallic ores supplying the national steel industry in Mexico. Despite their strong supply capabilities, Mexico imported USD 1.4 billion worth of metal ores from the United States in 2020 (NAICS 2122).

Energy

Although Mexican miners prefer to connect to the grid, when available, mining sites located at distance from the established electricity infrastructure continue using alternative power sources including photovoltaic and diesel-powered plants. The latter is being used less and less, according to experts in the field.

Non-metallic ores

Mexico’s yearly imports of non-metallic mineral products including glass, clay, cement, lime, and gypsum from the United States exceeded USD 231 million, per the 2020 figures. This is 10 percent lower than the previous year (NAICS 2123,).

Cement

The cement market in Mexico is made up of six major companies including, Cemex (46%), Holcim-Apasco (19%), Grupo Cementos Chihuahua (2%), Cementos Fortaleza (15%), Cemento Moctezuma (12%), and Cruz Azul (5%). Most of Mexico’s imports of this material comes directly from the foreign subsidiaries of these companies.

Glass

Mexican mining of silica sand, along with feldspar and some clays, is driven by the demand of the automotive, electrical, beverage, and construction industries, which are supplied almost entirely by domestic industry. Mexican imports of glass materials correspond to primary forms of glass for post-production.

Construction

In addition to the above mentioned, the construction industry also favors the aggregate mining segment, which is in turn an important buyer of machinery. Mexico is the United States’ second-largest trade partner for mining and construction equipment, after Canada. This industry is consistently in need new equipment, as well as of repair or replacement parts.

Opportunities

The U.S. Commercial Service Mexico is happy to assist you in exploring opportunities in the mining sector.

Exploration

The sector lacks enough suppliers of exploration services and perforation technologies. Mexican Government officials have expressed concern about the decrease in exploration investment over the last few years. In 2021, exploration will be a priority for the Mexican Government in the mining sector.

Lithium Production

The discovery of lithium deposits has encouraged the Mexican Government to announce its interest in supporting lithium production and developing a complete supply chain for lithium products. U.S. Geological Survey (USGS) reports identified resources of 1.7 million tons of lithium, ranking 10th globally.

Energy

Significant regulatory changes in Mexico’s energy sector are beginning to cause a perceivable decrease in new renewable energy projects. According to a recent report by Mexico’s Secretariat of Energy (Secretaría de Energía or SENER), 10 percent less solar capacity and 50 percent less wind capacity was installed in 2020 compared to 2019. While large-scale projects are likely to continue to experience difficulties given these policies, U.S. companies in the energy sector may still find reasonable business prospects in expanding miners’ current generation capacities.

Capital Equipment

Mexico is the United States’ second-largest trade partner for construction and mining machinery, after Canada. Total U.S. exports to Mexico of machinery for construction, mining, and agriculture totaled USD 2.67 billion in 2020. Of that, 12 percent was directed to mining and oil and gas industries, amounting to USD 325 million (NAICS 33313).

Safety

Mexico’s mining industry faces significant safety risks affecting workers, communities, and stakeholders. Therefore, solutions in these fields are in high demand.

Technology

Mining companies are seeking to improve their operations and shorten project construction times. Therefore, there are opportunities for 3D modeling and simulation software to be applied in new mining operations. Automated preventive maintenance solutions, condition monitoring, and autonomous production are being implemented at mines. Additionally, Mexico’s mining industry is integrating new technologies in their efforts to gain 4.0 status, including solutions for a faster supply chain and production flow to maintain low production costs.

Repair

The best prospects for selling replacement parts are specialized technicians and repair service companies with capacities to provide the fastest technical service and support. Dealers of replacement parts offering permanent inventory on consignment at mining locations are also preferred.

Environment

With United States-Mexico-Canada Agreement (USMCA) in force, mining activities in Mexico are required to comply with enhanced environmental and labor requirements. As result, environmental control products and services may be required by miners operating in Mexico.

Barriers

U.S. suppliers to the mining industry face no commercial barriers to entering this market. Changes in the tax code and increased concession fees would limit new projects and investment. Despite this, mining of precious metals in Mexico is still attractive to foreign and domestic companies.

As organized criminal activity has increased, fuel theft and clandestine exploitation of mineral resources are at stake. An institutional police team is being trained by Mexican Government intended to discourage crime in this sector. While this is being fully implemented, foreign investors and operators are increasingly required to tackle crime by contracting with private security firms.

Resources

  • Mexico Mining Chamber (CAMIMEX)
  • Assoc. of Mining Engineers, Metallurgists and Geologists of Mexico (AIMMGM)
  • National Institute of Statistics and Geography (INEGI)
  • Chihuahua Mining Cluster (CLUMIN)
  • Zacatecas Mining Cluster (CLUSMIN)
  • Sonora Mining Cluster

Events

XXXIV Convención Internacional de Minería, Acapulco, Guerrero
14 Congreso Internacional Minero Sonora, Hermosillo, Sonora 
For other events, please visit: www.geomin.com.mx

Contacts

For more information on the mining and minerals industries in Mexico, please contact:

Mario Vidaña
Commercial Specialist
U.S. Commercial Service–Monterrey
Tel.: +52 (81) 8047-3118

Mario.Vidana@trade.gov