This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 10/17/2019

Mining and Minerals

Mexico’s rich mining industry dates back more than 500 years and continues today, making it a best prospect industry sector for U.S. companies. 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 also a major employment generator, supporting over 379,000 direct jobs and almost 2 million indirect jobs in 2018.

Mexico contains outstanding geological potential for mining, which contributes to making Mexico the world’s fourth-largest recipient of foreign direct investment (FDI) for mining and the second destination of such FDI in Latin America. In 2018, of the total USD 32.7 billion of FDI inflow into Mexico, mining accounted for USD 1.4 billion, with a small percentage of that invested in exploration. Most of these investments were made by companies from Canada (which has the largest overall stock of mining investments in the country), the United States, Spain, Germany, and Japan. The majority of this FDI is directed to mining gold, copper, zinc, and uranium. Companies such as Newmont, Fresnillo PLC, Agnico Eagle, and Alamos Gold produce over 100,000 tons of gold each year. In 2018, 6,100 tons of silver was produced in Mexico, mined by Fresnillo, Newmont, Coeur D'Alene and others. Mexico’s copper production amounts to 3 percent of global production, mined primarily by Grupo Mexico, Cobre del Mayo, and Capstone.

According to the Mexican Mining Chamber (Cámara Minera de México or CAMIMEX), Mexico leads the world's production of silver. Mexico was the ninth-largest producer of gold and seventh-largest producer of copper in 2018. Mexico is also an important producer of coal with an annual coal production of 82,537 tons.

Mexico’s National Institute of Statistics and Geography (Instituto Nacional de Estadística y Geografía or INEGI) tracks production in four distinct mining categories: precious metals, non-ferrous, metallurgy, and non-metals. In 2018, Mexico’s mining production totaled USD 12.57 billion. Two major groups of minerals account for 86 percent of total production: precious metals mining with USD 5.6 billion (45 percent of total production) and non-ferrous minerals with USD 4.91 billion (39 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 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 its production to the United States. The third most important mineral imported by the United States is strontium. Mexico produced 56,500 tons in 2016 (the latest data available), with the United States importing 55 percent. Mexico is the world’s second-largest producer of strontium.

In 2018, Mexico imported USD 1.74 billion worth of minerals and ores (NAICS 212) from the United States, with copper ores and concentrates comprising 85 percent. The total U.S.-Mexico trade of minerals and ores totaled USD 2.15 billion.

Mexico Mining Production and Market Size
(Figures in USD billions)
 2015201620172018 2019 (Estimate)
Total Local Production13.4512.5612.7812.5712.62
Total Exports11.611.8812.4313.0513.10
Total Imports2.392.152.253.063.07
Imports from the U.S.2.102.131.561.741.76
Total Market Size*4.242.832.602.582.59
Exchange Rates15.8918.6818.9119.22719.15
*Total market size = (total local production + imports) – exports
*2019 per IMF forecast
Source: INEGI

Mexico's mining industry is dominated by Canadian companies, although there is also substantial Mexican capital involved in some of the most important mines producing silver, gold, and other important metals, and non-metal minerals. The U.S. presence is represented by Newmont, with their recent acquisition of a large gold mine, and Coeur Mining, both among the eight-largest mining companies in Mexico. U.K. miners like Bacanora Lithium are also exploring the Mexican market for investment.

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, and this will not change when the USMCA is ratified. 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 in connection with the USMCA, visit the Office of United States Trade Representative website at www.ustr.gov.

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

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. CAMIMEX suggests that foreign suppliers should notify state and municipal authorities, as well as local industry clusters, of their intention and nature of work/service to be provided prior to any visit to mining locations.


Leading Sub-Sectors

Top sub-sectors of opportunity in the mining sector are machinery; safety and security equipment; technology for modeling, simulation, and environmental control; and parts and service for repair.

Machinery. Aside from being one of the leading investors in the Mexican mining sector, the United States also benefits from its massive exports of mining machinery and equipment to that sector. Construction machinery and mining machinery represented 13.2 percent of the total U. S. machinery exports to Mexico, which amounted to USD 22.36 billion in 2018 (ITA, 2018).

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. Between 2015-2017, Mexico encountered five major mining disasters which could have been avoided with 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 need to have replacement and service parts available in the fastest possible time. Some dealers have agreed to a permanent inventory in consignment at mining locations. Specialized technicians and repair service companies often locate 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 vary between large projects and capital equipment during boom times and MRO services and parts during lean times.


Investments

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. Mexican government officials have expressed concern about the decrease in exploration investment over the last few years. CAMIMEX reported Mexico’s exploration investment declined from USD 1.16 billion in 2012 to USD 384 million in 2018. In 2018, Mexico dropped to 29th place in the Fraser Institute’s ranking of foreign investment attraction (factors include political perceptions, geological potential, and best practices). Note that CS Mexico does not directly assist with making investments in Mexico but we can assist with market entry activities.


Sales

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 aggresively in times of high production. During times of low production, miners focus on maintaing their equipment and machinery, creating an ideal environment for MRO sales. Mexico’s mining industry is integrating new technologies in a conservative way. The sector lacks reliable suppliers of exploration services and perforation technologies, including solutions for a faster supply chain and production flow to maintain low production costs.


Web Resources

Mexico Mining Chamber (CAMIMEX)www.camimex.org.mx
Assoc. of Mining Engineers, Metallurgists and Geologists of Mexico (AIMMGM)www.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 Vidaña
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.