Mexico's mining industry attracted US$3.5bn in FDI last year

Mexico’s mining sector attracted US$3.49bn in foreign direct investment last year, 118% more than the US$1.60bn in 2022, according to preliminary figures from the economy ministry.

However, the amount was 27% below the US$4.80bn in 2021, when the industry benefited from high metals prices and the lifting of COVID-19 measures, among other factors.

The amount includes investment in oil and gas extraction.

Of the total in 2022, the metallic minerals subsector received US$810mn, a drop of 71.2%, according to economy ministry figures published by mining chamber Camimex.

Despite this decrease, Camimex reported last July that investments in mining projects and active operations, including by Mexican companies, reached US$5.27bn in 2022, up 9.5% compared to 2021, although the chamber projected US$5.54bn.

Camimex projected a 1% drop for 2023 to US$5.21bn, but chamber president Jaime Gutiérrez said that the amount could vary if aspects of the new mining legislation that came into force last May were clarified.

A deadline for publishing the related regulations, or secondary legislation, expired last November.

Total FDI rebounds

Last year, Mexico attracted US$36bn in FDI, 27% more than in 2022, excluding the extraordinary amounts generated by the Televisa-Univisión media merger and the restructuring of airline Aeroméxico, the economy ministry said.

The director of economic analysis at Grupo Financiero Base, Gabriela Siller, wrote on social media that the FDI figure amounted to a record for preliminary data, although the all-time high for revised data was US$48bn in 2013.

Of the total received last year, 74%, or US$26.6bn, corresponded to reinvestment of profits while new investments represented 13%, or US$4.83bn.

Intercompany accounts, which refer to loans and payments between Mexican and foreign firms of the same group, contributed US$4.60bn.

“The behavior of FDI in the fourth quarter of 2023 is the result of economic stability, competitive advantages and the good business environment in Mexico, which confirms the confidence of foreign investors in the country and is shown through the record figure in the reinvestment of profits,” the economy ministry said in a statement.

But Siller cautioned that although the data was good, "the proportion explained by new investments is the lowest since records began in 1963."

“If new investments such as nearshoring are considered and what China has stopped receiving in investment is taken as the size of the nearshoring opportunity, it turns out that Mexico is taking advantage of only 7% of this opportunity. For this reason, for some, nearshoring is more of a myth than a reality,” she added.

Last year, 38% of FDI, some US$13.6bn, came from the US, with Spain, Canada and Japan following.

Likewise, 50%, or some US$18.1bn, went to the manufacturing sector, especially transportation equipment, metals, IT and others.