Mexican mining production shrinks in 2022 by value

The value of Mexico's mining output fell 5.3% last year to 317bn pesos (US$15.8bn) due to Russia's invasion of Ukraine, lower precious metal prices and domestic conditions hurting the sector's competitiveness, according to Mexican mining chamber Camimex.

The largest drop was seen in the non-ferrous industrial metals segment with a decrease of 8.2%, followed by precious metals with a 6.6% decline. Gold continued to be the star product, making up 30.6% of total production value, followed by copper (27.2%) and silver (17.6%), Camimex said in its 2022 annual report.

The country's five main mining states - Sonora, Zacatecas, Durango, Chihuahua and Guerrero - contributed 83.9% of the production value in 2022.

The mining sector remained an important foreign exchange generator last year, but Camimex said it fell from fifth to sixth place as it was surpassed by the automotive sector, the electrical, electronic equipment and machinery industries, remittances, oil exports, and tourism.

FDI falls 71%

The drop was partly due to the sector's decline in terms of foreign direct investment. Of the US$1.60bn captured by the wider mining sector in 2022 (including the oil and gas sector and related mining services), the metallic minerals segment made up US$810mn, representing a drop of 71.2% compared to the previous year, according to the economy ministry.

Despite the decline, Camimex said that investments in mining projects and existing operations rose 9.5% last year to US$5.27bn. The amount was however below the chamber's forecast for last year of US$5.54bn.

The failure to meet the forecast was due to the lack of new concessions being granted and permit delays, especially related to environmental issues, according to Camimex.

Last year Mexico was a global top-10 producer of 16 minerals instead of 17 as in 2021 due to the end of bismuth mining, said Camimex president Jaime Gutiérrez (pictured) at the presentation of the annual report.

The fiscal contribution of the mining companies affiliated with Camimex amounted to 72.9bn pesos last year, up 13.8%. “These results show the collection potential of our industry and the importance of having mechanisms that promote its development,” said Gutiérrez.

Based on figures from Mexican tax authority SAT, the chamber highlighted that copper, nickel, gold, silver, lead and zinc are among the products in the country with the highest level of effective tax rate.

Camimex participates in the technical roundtables for the secondary legislation of the new mining law, which came into force in May. Gutiérrez said that on July 9 the sector will present its views to the economy ministry. There is a 180-day period for the work on the secondary regulations. 

The chamber's executive director, Karen Flores, said the mining reform issue that causes the biggest concern for the sector is exploration. “It is an essential stage for the mining sector to continue working. In this sense, we hope that the regulations will provide greater clarity," she said.

"What we want is to match the country's exploration conditions with those in other parts of the world to remain competitive," said Gutiérrez.