Mexico mining FDI plummets in Q1

Foreign direct investment (FDI) in Mexico's mining sector plummeted 63% year-on-year in the first three months, according to preliminary data.

The economy ministry said in a report that FDI in the sector from January to March was US$419mn, down from US$1.13bn in the same period 2022. 

The figures include both oil and gas as well as metallic mining and mining-related services.

Last year, according to preliminary data, FDI in Mexico's mining sector plunged to US$1.60bn, down 66.5% compared to US$4.80bn in 2021. 

Mining chamber Camimex said in a statement that the figure reported by the ministry for all of 2022 did not present the breakdown for metallic mining, which saw FDI of US$2.83bn in 2021.

Additionally, "Camimex reported a total investment amount for 2021 of US$4.8bn, which is made up solely and exclusively of investment in the mining-metallurgical sector, whose main component is the investment made by members of Camimex, both Mexican and foreign."

Camimex members represent 90% of Mexican mining production.

Expectations for FDI are not positive after congress approved reforms to several mining-related laws that worry investors.

Over 70% of foreign miners in the country are Canadian, according to the most recent economy ministry data.

In April, Camimex said in a press conference that mining companies would stop investing around US$4bn a year if the mining reforms proposed by President Andrés Manuel López Obrador were approved.

Although the reforms finally approved are more flexible than the original government proposals, the mining chamber has not updated its projections. 

In Q1, Mexico received less overall foreign investment compared to the same period last year, although the FDI figure for the quarter was equivalent to half that received in all 2022, which was US$36.2bn.

FDI of US$18.6bn in January-March was down from US$19.4bn a year earlier, according to the preliminary report.