Mexico’s mining sector sees growth in April

Mexico's mining sector sees growth in April

Extraction of other raw materials in Mexico gained momentum in April, rising 5% annually after falling by the same amount in March.

Mining grew by 0.3% year-on-year in the first four months of the year, according to statistics agency Inegi’s monthly report on industrial activity.

Mining-related services fell 4.6% after falling nearly 17% in March. In the period January-April, the sector recorded a real decline of 7.9%.

Industry experts previously told BNamericas that mining is impacted by a regulatory environment that inhibits investment and development, especially primary exploration, as well as high inflation and exchange rates that impact operating costs.

Luis Humberto Vázquez, president of the Association of Mining, Metallurgical and Geological Engineers (AIMMGM), recently told BNamericas that 50% of junior exploration companies have gone out of business, while the remaining 50% simply survive.

Metal and non-metal mining is affected by the policy of freezing new licenses led by the government of Andrés Manuel López Obrador, as well as the uncertainty caused by the mining reform of May 2023, which, among other things, granted the SGM geological service exclusive exploration rights.

The lack of regulations on the four amended laws applicable to the sector is holding up various mining processes, especially those related to exploration, which in turn, according to the industry, is affecting demand for related services.

Vázquez warned that if these laws do not include provisions to help young miners who still survive, they too will have to go.

A new presidential constitutional reform initiative unveiled in January, aimed at banning strip mining and prioritizing domestic water use, would create new obstacles to mining and, if approved, would have “serious” economic impacts, sector officials say.

The central bank will release a quarterly report on regional economies this week, which is expected to provide more details on the main factors that influenced metals and non-metals mining in the first quarter.