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Despite its large mineral wealth Mexico’s mining sector has struggled and investment has hit a 12-year low, rattled by political uncertainty and insecurity. Patrick Kingsland takes a look at the industry and asks what it can do to once again become an attractive investment opportunity.
Mexico’s mining industry dates back as far as the Aztec empire and the ancient Maya civilisation. The search for minerals like gold by Spanish immigrants gave rise to major population centres like Guanajuato, Taxco and Zacatecas.
But despite Mexico’s long tradition of mining and continued industrial potential – just 25% of the country has been explored for minerals and oil to date – the sector is currently in an uncertain place, as new government policies, social unrest, insecurity and challenging access to finance undermine investment.
According to a report published in May by Camimex, Mexico’s mining industry chamber, investment in the sector hit a 12-year low last year with foreign and local companies spending roughly $383m on exploration, compared to $612m the year before.
“Mexico is losing its attractiveness as a mining jurisdiction globally,” chamber president Fernando Alanís told the local daily newspaper, La Jornada.
A turbulent market
It is not the first time Mexico’s mining industry has faced challenges in recent years. The global fall in commodity prices in 2012 caused problems across the sector and also impacted several neighbouring Latin American countries.
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