| Written by Yeudiel Valdivia
GOLD & SILVER MINING IN MEXICO
Gold mining in Mexico is a significant sector within the country's mining industry, contributing to its position as one of the world's top producers of precious metals. The Penasquito mine, situated in the northeastern part of Zacatecas, Mexico, is the top spot for gold mining in the region and is quite well-known globally for its mining operations. This massive pit isn't only focused on extracting a lot of gold -- it's also the number two site for silver mining in Mexico. The company Newmont is in charge, and they're recognized for their success in mining gold. Besides, it's a significant source of zinc and lead, which allows Mexico to produce a variety of items from different minerals. Last year, the mine produced 85,000 ounces of gold (a decrease from the previous year's 137,000), 7,463,000 ounces of silver (also down from 8,080,000), 41,000 ounces of lead, and 102,000 ounces of zinc. The mine faced a serious setback with labour issues that went on for four months and caused them to lose a lot of money daily. However, after the workers voiced their concerns, they and the company managed to negotiate better wages in October 2023, as confirmed by the mining authorities, the labour union, and Mexican employment officials.
The second one, the El Limon Guajes Mine Complex (ELG) is made up of the El Limon, Guajes, and El Limon Sur open pits, the El Limon Guajes Underground Mine and the processing plant. Approximately 13,000 tonnes per day (tpd) are processed at the plant, and 89% of the gold is recovered. That's slightly higher than the 87% originally designed. El Limon and Guajes open pits source the majority of our ore. At the end of 2022, the open pits were estimated to have 885,000 gold equivalent ounces at an average gold equivalent grade of 3.27 gpt (863,000 ounces of gold at an average grade of 3.20 gpt). With the forecast depletion of reserves in 2025, open-pit mining is expected to be stopped. Lower-grade ore is being stockpiled. A total of 508,000 gold equivalent ounces were in reserves at the end of 2022 at an average gold equivalent grade of 6.17 gpt (480,000 ounces of gold at an average gold grade of 5.83 gpt).
Cerro Las Minitas is a silver-polymetallic mine owned by Southern Silver Exploration in Canada. In north Central Mexico, the project lies at the center of the Faja de Plata (Belt of Silver), which has current silver reserves and historic silver production of more than 3,000,000,000 ounces. It's 6km northwest of Guadalupe Victoria Town and 70km northeast of Durango City. At Cerro Las Minitas, long-hole open-stopping (LHOS) was selected as the preferred method based on project parameters.
MINING IN MEXICO: ZINC AND COPPER
A metal that Mexico shines as a leading producer is zinc, known for its anticorrosion properties and critical role in galvanizing. Mexico's zinc mining sector is characterized by both large-scale operations and smaller, but significant, projects that contribute to its position as the world's top zinc producer.
In addition to Penasquito, Velardena Zinc is a major mining operation in Durango's Velardena district. It's known for producing zinc, producing 86,525 tons in 2022. It also produces lead, silver, and gold as by-products. It's owned by Industrias Penoles, the second-largest mining company in the country. The geology of the Velardena region is characterized by complex ore bodies containing a variety of minerals, making it a rich metal source.
The Tizapa mine, owned also by Industrias Penoles and located in the State of Mexico, is one of Mexico's biggest zinc and copper producers. With 37,770 and 1,372 tons in 2022, respectively, it makes it one of Mexico's most notable mining projects.
WIND OF CHANGE
In 2023, the Mexican Congress passed a series of legislative amendments that constituted a significant reform of the mining sector. The amendments revise the Mining Law, National Waters Law, General Law of Ecological Equilibrium and Environmental Protection and General Law for the Prevention and Integral Handling of Wastes (see also: responsible mining). As a result, mining concessions are shorter than 50 years and are awarded through a public bidding process if all environmental, social, and labour permits are obtained. Mineral concessions are now granted for specific minerals, not for the whole area. As mining isn't viewed as a preferential activity anymore, title holders don't have access to land and superficial rights adjacent to the concession.
In addition, the reform gives the Ministry of Economy the power to approve transfers between entities and to grant permanent mining concessions. Concession holders have to consult with the public and indigenous communities ahead of time. At least 5% of net profits have to go to indigenous communities in adjacent and affected areas. In addition to ecological concerns, concessions can be cancelled if you don't notify the Ministry of Economy about accidents that threaten people or the environment. There are a lot of new mining offences, including those that can make titleholders and personnel criminally liable. A ten-year legal term for enforcement compliance and penalties from the Ministry of Economy is added.
With presidential elections in June 2024, Claudia Sheinbaum of the left-wing Morena party has pledged to halt open-pit mining concessions altogether and ban fracking. However, she also plans to continue supporting state oil company Pemex, while simultaneously investing over $13 billion in clean energy projects. This mixed approach leaves some uncertainty about her ultimate impact on mining.
Mining executives express optimism that the operating environment will improve under the next administration. Luis Humberto Vázquez, president of the mining engineering association AIMMGM proclaimed "I really feel that there is beginning to be a greater understanding of the needs, both within the government and among us, (…) I believe that with the (government) that arrives, we'll have better prospects in mining, and that is for the benefit of Mexico." (1)
On the other hand, Colin Hamilton, BMO Capital Markets director of commodities research claimed last days: “The country’s security situation and rising fiscal deficit, coupled with the strengthening of the Mexican peso, will represent critical challenges for her presidency. (…) From a mining sector perspective, it is unclear whether this will mean any lifting of restrictions, such as the de facto ban on new open pit mines, though we would see this as only a possibility rather than a probability in the near term.”
ECONOMIC IMPACT OF MINING IN MEXICO
Mexico is a large exporter of mining products, with a trade surplus of USD 12.8 billion in 2022. Mexican exports of minerals and ores to the world totalled USD 17.6 billion in the same year, growing six per cent since 2017. Imports have grown over 13 per cent annually since 2017. Forty-seven per cent of Mexico’s imports of minerals and ores come from the United States, reaching USD 2.28 billion in 2022. The United States relies heavily on imported fluorspar, graphite, manganese, and strontium imports from Mexico and other countries.
Over 370,000 people work in the mining industry directly, while millions more work indirectly in related industries like transportation, logistics, and equipment manufacturing. Rural and remote areas, where jobs are hard to come by, need high-paying, skilled jobs from the sector (continue reading about underground safety).
FAQ
How big is mining in Mexico?
Mexico's mining market was worth USD 1.83 billion in 2022 and is expected to grow at a compound annual growth rate of 2.9% from 2023 to 2030. Read also: "Mines in Mexico: A Typology"
Who owns mines in Mexico?
74% of Mexico's mining concessions are owned by Canadian companies. Some of the most notable mining companies are Industrias Peñoles, Fresnillo PLC, Grupo Mexico, Torex Gold, Newmont, Southern Silver Exploration, Ganfeng Lithium, Fortuna Silver Mines, Alamos Gold, Hochschild Mining, and Excellon Resources.
What is the biggest mine in Mexico?
The Buenavista mine, historically known as the Cananea copper mine, is a large open-pit copper mine located in Cananea, Sonora, northwest of Mexico. It lies 35 km south of the international border near Nogales, Arizona. Buenavista mine represents one of the largest copper reserves in Mexico and the world.
TAKEAWAY
Mexico's mining industry shows how diverse its geology is and how mineral extraction and utilization have been in the past (compare also the history of Mexican mines). In Mexico, mining is one of the key pillars of the economy, contributing to the GDP and employment as well as the global supply chain for minerals and metals. While the sector faces challenges with sustainability and social responsibility, it's integrating new technologies and practices to make sure it's sustainable and prosperous for years to come (learn more about mine technology). The future of Mexican mining looks bright thanks to government and industry initiatives geared toward fostering growth while minimizing environmental impact. Moving forward, Mexico's mining sector will remain an important component of the economy, contributing to the development and prosperity of the country.
Delve deeper into one of our core topics: Miner Safety
Sources:
(1) https://www.mining.com/new-technocrat-mexican-leader-unlikely-pro-mining-even-as-she-replaces-whim-and-bombast
Author
Yeudiel Valdivia, VP Sales Safe Mining
Yeudiel Valdivia holds a Master’s degree in Engineering (Telecommunications) and a Bachelor of Electrical and Electronic Engineering. He spent most of his professional career in sales and business development for industry segments including mining. Yeudiel is fascinated by the positive impact of technology in people’s life and how people can work safer and under better conditions, he is interested in how technology can transform businesses making them more efficient, agile, and productive and its potential for the economy growth in countries and regions. Yeudiel writes mainly about the digitalization of industries, driven by advancements in technology enabling new business models.
