First Majestic pondering LNG power supply for Mexico mine

Vancouver-based First Majestic Silver is looking at replacing the diesel generators used for on-site backup power at its San Dimas mine in Mexico’s Durango state with liquefied natural gas (LNG) as part of its ongoing cost and carbon reduction initiatives.

“This will generate substantial cost savings and result in a reduction in carbon emissions of up to 25%, when backup power is required,” the company said in a statement. 

Other companies, like Mexico’s Industrias Peñoles, which has integrated operations producing non-ferrous metals and chemicals, are pushing into the clean energy generation sphere.

Peñoles' energy head Leopoldo Rodríguez told BNamericas last month that the company has a lot of wind power and wants to diversify into solar, storage, and a thermal complement. Initially, it will be with natural gas, but eventually it could evolve toward biomethane or green hydrogen. 

The Andrés Manuel López Obrador administration, which ended on October 1, focused on fossil fuels to help national oil company Pemex and public electricity utility CFE, freezing the granting of permits for private sector clean energy projects.

Ahead of the June general elections, Grupo México's energy director, Gustavo Ortega Gómez, told BNamericas it hoped the new Claudia Sheinbaum administration would be more favorable to renewable energy.

Production

First Majestic focuses on producing silver and gold in Mexico and the US. It owns and operates the San Dimas silver-gold mine, the Santa Elena silver-gold mine in Sonora state and the La Encantada silver mine in Coahuila, as well the suspended Jerritt Canyon gold mine in Nevada.

The company reported total production in Q3 of 5.49Moz silver equivalent, consisting of 1.97Moz of silver and 41,761oz of gold. The silver equivalent figure is up 4% compared to the previous quarter, primarily due to increased gold production at San Dimas and Santa Elena, but down 13% year-on-year. All three Mexican mines are underground operations.

In late July, First Majestic announced the discovery of a new, high-grade gold and silver vein-hosted system dubbed Navidad at Santa Elena. The new discovery was made adjacent to the company’s producing Ermitaño mine at Santa Elena. The Canadian miner is focusing its exploration on Navidad, with seven of the nine active rigs at Santa Elena allocated to drilling the new vein system.

“As a result of a period of continued rain this year following extended drought conditions, the company’s Las Truchas hydroelectric plant, in Durango, is back at full capacity,” the statement added. “Las Truchas provides reliable, efficient, and renewable energy at lower costs and with a lower carbon footprint to the San Dimas mine.”

On September 5, First Majestic and Gatos Silver announced they reached a definitive merger agreement. The proposed transaction would consolidate three world-class, producing silver mining districts in Mexico to create a leading intermediate primary silver producer, according to First Majestic.