Exports of the mining sector in Mexico register ups and downs
Exports of the mining sector in Mexico have registered ups and downs in recent years, according to data from the Bank of Mexico.
In its most recent annual trajectory, exports from the mining sector, excluding oil, fell 3% in 2016, rose 24.2 and 14.8% in the next two years, and fell 0.7% in 2019.
Mexico has a substantial and varied of mineral resources and is one of the world’s leading producers of silver, bismuth, antimony, fluorite, graphite, barite, molybdenum, lead, and zinc.
According to the Constitution and applicable Mexican laws, mining activities can only be carried out by the government or, alternatively, by Mexican natural or legal persons, if they are granted a government concession.
Foreign investment, including controlling interests, in Mexican mining companies is permitted under Mexican law, with the exception of any extraction of radioactive minerals.
Foreign investment and mining regulations allow foreign investors to have a majority stake in any Mexican mining company during the concession period.
These foreign investment regulations promote the development of mining, since they allow: a broader exploration, the discovery of new sources of financing and a greater development of national technology.
Exports of the mining sector
Under the Mexican Mining Law, private companies receive concessions to explore for up to six years and to exploit for up to 50 years.
In 2018, the mining sector continued its steady year-over-year trend of declining production, which was mainly due to the continued decline in oil and gas extraction in the fourth quarter of 2018, as well as a decrease in the mining-related services.
This downward trajectory continued in the first quarter of 2019, due to stagnant levels of mining of metallic and non-metallic minerals compared to 2018 and a decrease in the production of oil rigs.
The second quarter showed a similar trend, largely stemming from the downward trajectory of oil and gas extraction and weakness in mining-related services.
Mining
In the third quarter of 2019, the metallic and non-metallic minerals sectors continued to perform poorly. However, there was an upward trajectory in the industry attributable to the stabilization of the oil platform and the reactivation of services related to mining, due to increased investments in the maintenance and repair of existing wells and new drilling products.
Finally, the mining industry showed a greater recovery during the fourth quarter of 2019 associated with the reactivation of the platform and the improvement in the area of metallic and non-metallic minerals, despite a continuous fall in services related to mining.
