Mining exploration in Mexico hits 12-year low

Newmont’s Peñasquito gold mine in Mexico. (Image: Newmont via Flickr)

Investment in mineral exploration in Mexico hit a 12-year low last year, due mainly to social conflicts that forced some companies to halt operations, according to a report published this week by the country’s mining chamber, Camimex.

Around $383 million was invested in exploration in Mexico last year, down 37.4% from the $612 million registered in 2017

Foreign and local companies invested about $383 million exploring in Mexico in 2018, down 37.4% from the $612 million registered in 2017, official data shows. The sum also represents a 67.1% drop from an all-time-high of almost $1.2 billion reached in 2012.

While juniors’ difficulties accessing finance also played a role, the Canadian Chamber of Commerce (Cancham) in Mexico says actions such as the one-month blockade of Newmont Goldcorp’s Peñasquito gold mine and the ongoing obstruction to MAG Silver’s project in Chihuahua have weighed in.

“In general, the economy of extortion is a factor of uncertainty for mining activity,” Cancham’s president, Armando Ortega, told El Economista.

Mining exploration in Mexico hits 12-year low

Source: Camimex | Graph:

Only about 25% of Mexico, the world’s No.1 silver producer, has been explored for mineral and oil riches so far.

The figure may not grow much in the next few years, as President Andres Manuel López Obrador has promised to increase scrutiny on miners’ environmental practices and treatment of Indigenous people.

Roughly 70% of foreign-owned mining companies operating in Mexico are based in Canada, according to Global Affairs Canada.