Mining in Mexico to restart next week

Peñasquito silver mine in Mexico. (Image courtesy of Hexagon Mining)

Mining in Mexico, the world’s largest silver producing country, is set to fully resume next week as authorities implement a gradual nationwide return to a “new normal,” which will see more than 200 coronavirus-free towns reopen on May 18.

The rest of the country, which has been on a nationwide lockdown for more than seven weeks, will resume activities on June 1, the government announced late on Wednesday.

Mexico had declared mining a non-essential activity, ordering the temporary suspension of all operations. It recently yielded to industry pressure and is now considering mining a vital activity.

The world’s largest silver producer’s decision follows a report showing that 555,247 jobs were lost in April alone

Miners and explorers will likely apply different approaches to the resumption of activities.

Newmont Mining (NYSE: NEM), the world’s no. 1 gold producer, is gradually bringing its Peñasquito mine back online. The ramp-up is expected to take roughly two weeks to reach stable production levels, it said.

Alamos Gold (TSX, NYSE: AGI) said on Thursday it would begin ramping up operations at its Mulatos mine on Monday.

The company, which has already restarted its Island Gold mine in Canada, said both assets were expected to return to normal operating levels in June. Alamos will provide an updated 2020 production forecast in the coming weeks.

Torex Gold (TSX: TXG) is targeting the end of May to resume full production at its El Limón Guajes mining complex. The processing plant will continue to treat low-grade stockpile material for the remainder of May. By that time, the crews will have ramped up mining operations, and the plant will begin processing regular mine grade material.

Santacruz Silver Mining (TSX-V: SCZ) has also outlined plans to restart mining and milling operations at its Zimapan mine, in Mexico’s eastern Hidalgo state.

Silver miners gear up

Other miners present in the country, including First Majestic (NYSE: AG) (TSX:FR), Pan American Silver (TSX: PAAS), Argonaut Gold (TSX: AR), Sierra Metals (TSX: SMT), Excellon Resources (TSX: EXN) and Alamos Gold (TSX, NYSE: AGI), are expected to unveil plans over the next few days.

Mexico is responsible for nearly 23% of world production of silver, churning out more than 200 million ounces last year, up from 196.6 million ounces in 2018.

It also has major copper and zinc mines, operated by Grupo Mexico and Southern Copper, and produces a significant amount of gold, making the mining sector responsible for about 4% of the nation’s gross domestic product.

The country’s phased reopening strategy follows a report by the nation’s social security institute, which showed that 555,247 jobs were lost in April alone. The drop is the largest monthly decline in Mexico’s history.