This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 10/12/2018
Mexico’s rich mining industry dates back more than 500 years and continues today, making it a best-prospect industry sector for this country. This section provides a market overview and trade data on this historic sector.

Overview

Mexico's 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 a major job generator, supporting over 370,000 direct jobs and over 1.7 million indirect jobs in 2017.

Experts say 70 percent of Mexico’s territory contains outstanding geological potential for mining, and this potential for mining makes Mexico the world’s fourth-largest foreign direct investment (FDI) destination for mining and the first destination of such FDI in Latin America. Mexican central bank Banexico reports that Mexico’s mining sector received USD 1.02 billion in FDI in 2017. Most of these investments were made by companies from Spain, Germany, Israel, the United States, and Canada—the latter having the largest overall stock of mining investments in the country. Most of this FDI in Mexico is directed to mining gold, copper, zinc and uranium. Companies like Goldcorp, Fresnillo PLC, Agnico Eagle, and Alamos Gold produce over 100,000 tons of gold altogether every year. In 2017, one-fifth of the world's production of silver, or four million tons, came from Mexico, mined by companies including Fresnillo, Goldcorp. and Coeur D'Alene. Copper production amounted to 463 thousand tons, produced mainly by Grupo Mexico, Cobre del Mayo, and Capstone.

The list of large Mexican-owned mining companies includes Peñoles, Minera Frisco, Grupo Mexico, Peña Colorada, and Mexicana de Cobre. Other important Mexican-owned contracting companies and service providers include well-known Signum, Cominvi, Alfil, and GDI.

According to the Mexican Mining Chamber (CAMIMEX), Mexico was the world's largest producer of silver, ninth-largest producer of gold, and seventh-largest producer of copper in 2017. It also is among the top five producers of sodium sulfide, fluorite, celestite, and wollastonite. Mexico is also a large producer of coal, although its annual production is not comparable with larger producers like China, the United States, India, Australia, and Indonesia. Mexico's overall coal production amounted to 7.28 million tons. The world's overall production amounted to 3.656 billion tons in the same year, according to BP Review.

Mexico’s National Institute of Statistics and Geography, INEGI, tracks production in four distinctive mining categories: precious metals, non-ferrous, metallurgy and non-metals. Mexico’s mining production in 2017 amounted to USD 12.7 billion. Two major groups of minerals account for 86 percent of total production: precious metals mining with USD 6.27 billion (49 percent of total production), and non-ferrous minerals with USD 4.63 billion (36 percent).

Mexico is a major producer of 12 minerals, three of which are critical for U. S. demand: fluorspar, graphite and strontium. Mexico is the second-largest producer of fluorspar in the world and still has a calculated reserve of 32,000 tons, with 72 percent of production exported to the United States. Mexico has 3,100 tons of reserves of graphite and is the world’s eighth-largest producer, exporting 33 percent of production to the U.S. The third most important mineral imported by the United States is strontium. Mexico produced 56,500 tons in 2016 (the latest data available), and the United States imported 55% of that. Mexico is the world’s second-largest producer of strontium.

Mexico Mining Production and Market Size
(Figures in USD billions)
 2015201620172018 (Estimated)
Total Local Production13.4512.6112.7813.08
Total Exports14.615.6817.4817.88
Total Imports8.127.958.338.52
Imports from the U.S.
 
3.122.131.561.60
Total Market Size*6.974.833.633.72
Exchange Rates15.8918.6818.9119.09

*Total market size = (total local production + imports) - exports
Sources: INEGI and CAMIMEX

Mexico's mining industry is dominated by Canadian companies, but there is substantial Mexican capital involved in some of the most important mines producing silver, gold, and other important metals, as well as non-metal minerals. The presence of international suppliers of machinery, equipment and parts is also numerous, and the market is very competitive.

When selling to Mexico’s mining industry, the U.S. exporter must consider that mining companies have a purchasing department at their mining site. This office has the authority to purchase maintenance, repair and overhaul items (MRO), while the corporate office typically manages and makes purchase decisions on capital equipment. Since many mining companies are foreign, the U.S. supplier may find these mines’ corporate offices abroad. Some suppliers approach their potential buyers through the regional mining clusters that have most of the major mining companies and their suppliers as members.

Foreign suppliers to the mining industry have very few barriers to entering this market. NAFTA has made it easy for U.S. suppliers to sell in Mexico without complications. In fact, most of the bureaucratic burden falls on the Mexican importer, and U.S. suppliers must only expedite their products to the arranged port of entry or U.S. border. U.S. exporters typically quote EXWORKS or DAP prices to their Mexican clients (see the International Chamber of Commerce website for a list of these INCOTERMS). (For future developments and information on eventual agreements related to the NAFTA renegotiation, check the Fact Sheets and NAFTA pages at the Office of United States Trade Representative at www.ustr.gov.)

In Mexico, the mining industry is susceptible to criminal activity. Robbery and cargo hijacking are risks which require larger investments in security services and provisions.
 

Leading Sub-Sectors

Safety and Security

Mining operators are striving to find ways to maximize productivity while also improving their workforce safety and minimizing damage to the environment. From 2015-2017, Mexico has dealt with five major mining disasters involving people and the environment which could have been avoided with the proper safety procedures and technologies. An increase in criminal activity around this industry also brings opportunities for technologies to secure large infrastructure and cargo transport.
 

Technology

Mining companies are seeking to improve their operations and shorten project construction times. Therefore, this demand opens opportunities for sophisticated tools for modeling and simulation to be applied in new mining operations. In 2016–2017 Mexico also implemented a new round of stringent environmental control measures for 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.
 

Repair

Operating mines in Mexico are in great need of replacement and service parts supplied in the shortest possible time to decrease down time. Some dealers have agreed to a permanent inventory in consignment at mining locations. Specialized technicians and repair service companies have their shops and plants near the mining locations to provide the fastest technical service and support.

Opportunities

The U.S. Commercial Service Mexico is happy to assist you in exploring opportunities in the mining sector. Opportunities for U.S. mining equipment and service companies swing between large projects and capital equipment during boom times and MRO services and parts during lean times.

Mining is a long-term, high-risk investment. Exploration can take 10 years or longer, and the probability of success is very low. Once mining operations start, the life of the mine might be 20 to 30 years, depending on its size and mineral content. Safely closing an exhausted mine also takes time. At the 12th International Mining Conference in Chihuahua in April 2017, Mexican government officials expressed concern about the decrease in exploration investment over the last few years. S&P Global Market Intelligence reported Mexico’s exploration investment declined from 2015 to 2016. In the same period, Mexico dropped from 37th to 50th place in the Fraser Institute’s ranking of how well each country attracts investment, based on political perceptions, geological potential, and best practices.

The mining industry is highly dependent on the global market and international prices of minerals with its volatility between high and low production years. For that reason, suppliers of large infrastructure projects or capital equipment should act aggressively in times of high production. During times of low production, miners devote most of their time to maintaining their equipment and machinery, creating an ideal environment for MRO sales. Mexico’s mining industry is integrating new technologies in a conservative way. Although mines need faster supply chain and production flow, some miners support maintaining low labor costs to lower production costs.

Web Resources

Mexico Mining Chamberwww.camimex.org.mx
Assoc. of Mining Engineers, Metallurgists and Geologists of Mexicowww.aimmgm.org.mx
Info Minewww.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 Clusterwww.clusterminerosonora.com.mx

Events

Contacts

For more information on Mining and Minerals in Mexico, please contact:

Mario Vidana

Commercial Specialist

U.S. Commercial Service – Monterrey

Tel.: +52 81 8047 3118

Mario.Vidana@trade.gov
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Mexico Mining Equipment and Machinery Market Access