Mexico - 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: 2020-08-19

Mexico’s rich mining industry dates back more than 500 years and continues today, making it a best prospect industry sector for U.S. companies. This section provides a market overview and trade data on this historic sector.

Overview

Mexico's total production of mining and mineral products accounted for USD 12.69 billion in 2019. Precious and non-ferrous metals account for 86 percent of total production. For Mexico, the mining industry is an important revenue generator, contributing 8.3 percent to the industrial GDP and 2.5 percent to the national GDP. It is also a significant employment generator, supporting over 379,000 direct jobs and almost 2 million indirect jobs.

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.

Production. In 2019, Mexico imported USD 2.17 billion worth of minerals and ores (NAICS 212) from the United States. Mexico is a major producer of 12 minerals, three of which are in high demand in the United States: fluorspar, graphite, and strontium. Mexico produced over 1.1 million tons of fluorspar in 2019, with over 70 percent of that exported to the United States. Graphite reserves are calculated at 3.1 billion tons, placing Mexico as the world’s eighth-largest producer, exporting 33 percent of its production to the United States. The third most important mineral imported by the United States is strontium. Mexico produced 44,202 tons in 2019, with the United States importing 55 percent. Mexico is the world’s second-largest producer of strontium. 

Mexico leads the world's production of silver. With 6,300 metric tons produced in 2019, it is followed by Peru and China with half that capacity. 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. In 2020, the Mexican Government will continue exploring new coal deposits as it plans to reduce its imports of the commodity. 

Foreign Direct Investment. Mexico is the world’s fourth-largest recipient of foreign direct investment (FDI) for mining and the second destination of such FDI in Latin America. Mexico's total FDI inflow amounted to USD 32.9 billion in 2019, with only 1.8 percent invested in mining during that year. Most mining FDI originated with companies from Canada (which has the largest overall stock of mining investments in the country), the United States, Spain, Germany, and Japan. The majority of FDI mining inflow is directed to mining gold, copper, zinc, and uranium. Mexico's mining industry is dominated by Canadian companies, although there is also substantial Mexican capital involved in some of the most important mines producing silver, gold, and other important metals, and non-metal minerals. The U.S. presence is represented by the Penasquito mine, a multi-mineral asset and largest producer of gold in Mexico. Overall U.S. presence amounts to 33 companies.

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

 

2015 

2016 

2017 

2018  

2019 

2020* 

Total Local Production 

13.45 

12.56 

12.78 

12.57 

  12.69 

11.42 

Total Exports 

11.6 

11.88 

12.43 

13.05 

13.42 

12.07 

Total Imports 

2.39 

2.15 

2.25 

3.06 

3.20 

2.88 

Imports from the U.S. 

3.12 

2.13 

1.56 

1.75 

2.18 

2.03 

Total Market Size* 

4.24 

2.83 

2.60 

2.58 

2.47 

2.22 

Exchange Rates 

15.89 

18.68 

18.91 

19.23 

19.26 

20.00 

Total market size = (total local production + imports) – exports 
*2020 per IMF forecast 
Source: INEGI, OTEA

Leading Sub-Sectors

Machinery

Mexico is the U.S. second-largest trade partner for construction machinery and mining machinery, after Canada. The U.S. global exports of machinery for construction, mining, and agriculture amounted to USD 28.9 billion, 69 percent of which is directed to the first two. U.S exports of construction and mining machinery to Mexico totaled USD 1.8 billion in 2019.

Safety and Security

Mining operators are striving to find ways to maximize productivity while also improving workforce safety and minimizing damage to the environment.  Mexico’s mining industry faces significant security risks affecting workers, communities, and stakeholders and 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 state-of-the-art modeling and simulation software to be applied in new mining operations. Automated preventive maintenance solutions, remote monitoring, and autonomous production are being implemented at mines. The Mexican Government is requiring more environmental control measures at mining companies. To comply with these regulations, mine operators must use gas detection products, soil stabilizers, dust removal systems, ventilation, water filtration, and erosion control systems. Exploration and drilling technologies are also in great demand.

Repair

The best prospects for selling replacement parts are specialized technicians and repair service companies which have their shops and plants near mining locations to provide the fastest technical service and support. Dealers offering permanent inventory in consignment at mining locations are preferred.

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 2020, exploration will be a priority for the Mexican Government in the mining sector. No new mining concessions were opened in 2019 and the effects of this showed in lower FDI in the sector. The President has stated that new concessions will be on hold during his administration (2018 to 2024).

Lithium Production

At the end of 2018, Mexico announced its great potential for lithium production with reserves calculated at 243 million tons, so far the world’s largest. The Mexican Government has announced its interest in developing a complete supply chain from mineral mining through lithium products.

Energy

Clean energy projects are increasing in this industry as a means to reduce energy bills by up to 20 percent. At the end of 2019, Mexico's largest miner announced plans to reach 51 percent consumption of clean energy through 2024. This appears to be a trend being replicated by other miners in the country. 

Capital Equipment

Mexico is the U.S. second-largest trade partner for construction machinery and mining machinery, after Canada. Machinery and equipment utilized in this industry are in constant renovation; new equipment, parts, and accessories are replaced periodically. 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.

Environment

With USMCA, mining activities in Mexico will follow the same environmental and labor regulations in place in its partner countries, and so will its suppliers. As result, environmental control products and services may be required by these miners.

Barriers

U.S. suppliers to the mining industry face no barriers to entering this market, and this will not change with the entry into force of the U.S. Mexico Canada Agreement (USMCA). For information on the implementation of USMCA, visit the Office of the United States Trade Representative website at www.ustr.gov; or the Customs and Border Protection website at https://www.cbp.gov.

Uncertainty has entered the mining picture as the current President has indicated that extractors of Mexico's mineral wealth could be asked to pay higher taxes and changes in the tax code that would limit deductions for exploration expenses.  Despite this uncertainty and the current tax burden, mining of precious metals in Mexico is still attractive to foreign and domestic companies.  

Web Resources

Mexico Mining Chamber (CAMIMEX)

www.camimex.org.mx

Assoc. of Mining Engineers, Metallurgists and Geologists of Mexico (AIMMGM)

www.aimmgm.org.mx

Info Mine

www.infomine.com

National Institute of Statistics and Geography (INEGI)

www.inegi.gob.mx

Chihuahua Mining Cluster (CLUMIN)

www.clumin.org

Zacatecas Mining Cluster (CLUSMIN)

www.clusterminerodezacatecas.org

Sonora Mining Cluster

www.clusterminerosonora.com.mx

Events

Contacts

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

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

Mario.Vidana@trade.gov