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Welcome to MexicoOverview of Resources
Industrial Minerals and Gemstones
Welcome to Mexico
Mexico is a part of Central America with the United States of America to the north and Guatemala to the south. The total area of the country is 1,964,375 km2, and it has a population of 114,975,406 as of July 2011. The country’s climate varies from tropical to desert.
|The national flag of Mexico.
Image Credit: CIA Factbook
Ever since gaining independence from colonial rule in the 19th century, the Mexican government has been trying to solve many socio-economic issues such as low wages, better public education system, under-employment concerns, modernizing labor laws, unequal distribution of income, upgrading infrastructure, and fewer opportunities for advancement in the southern states.
Mexico’s economy was affected during the 2008-2009 global downturn; however the country is on the way to economic stability with its GDP progressing every year with $1.596 trillion in 2010 and $1.683 trillion in 2011. The country has a free market economic policy and belongs to the trillion dollar class.
Mexico is a country with abundant natural resources such as gold, silver, copper, lead, zinc, natural gas, and petroleum. The mineral industry of Mexico is an economically profitable sector and a major revenue generator for the government.
Overview of Resources
The major oil-producing regions of Mexico are located in the eastern and southern regions of the country while gold, silver, copper, and zinc can be found in the northern and western regions of the country. In 2010, Mexico was the leading producer of silver in the world.
In terms of production of resources, as of 2010, Mexico is:
- The second largest producer of fluorspar
- The third largest producer of celestite, bismuth, and sodium sulfate
- The fourth largest producer of wollastonite
- The fifth largest producer of lead, molybdenum, and diatomite
- The sixth largest producer of cadmium
- The seventh largest producer of graphite, barite, and salt
- The eighth largest producer of manganese and zinc
- The 11th largest producer of gold, feldspar, and sulfur
- The 12th largest producer of copper ore
- The 14th largest producer of iron ore and phosphate rock
Mexico’s major mining companies are as follows:
- Industriales Peñoles
- Grupo Mexico
- Empresas Frisco
The map of Mexico. Image Credit: CIA Factbook
In 2010, Mexico’s gold production amounted to 25.4% of the total value of the mineral industry. The gold mines produced 72,596 kg of gold, which was a 41% increase compared to that of 2009. Goldcorp Inc. of Canada is one of the leading producers of gold in the country, contributing to almost 29% of Mexico’s total gold production.
Mexico accounted for 17.5% of the world’s silver production in 2010 with the silver mines producing 4,411 t.
Despite the fact that the country does not have substantial iron ore reserves, the production is sufficient to meet the domestic demand. Mexico produced 14 million Mt of iron ore in 2010. Crude steel and pig iron production increased by 19.7% and 16.7%, respectively, compared to the previous year.
The el Arco project of Grupo México in the State of Baja California produces 190,000 Mt/yr in copper concentrates and cathodes. Gold and molybdenum production is also planned by Grupo México. Total value of copper production increased by 12% compared to that of 2009.
Zinc metal production also increased by 3% in 2010 compared to the previous year.
Industrial Minerals and Gemstones
Mexico is one of the top 10 industrial mineral producers in the world. The total value of the industrial minerals production amounted to $730 million in 2010.
The major producer of gypsum in the country was Compañia Occidental Mexicana S.A. de C.V.
Mexico’s coal production in 2009 amounted to 16 million t, compared to 7 million t in Brazil. In 2010, coal production increased to 27.56 Mt, which was a 19.6% increase compared to the previous year. Carbonifera San Patricio S.A. de C.V., GAN, Grupo México, and Materiales Industrializados S.A. de C.V. (Minsa) are the two major companies dealing with coal production.
Excavated Maya walls at Chacchoben. Credit: CIA Factbook
Due to the declining petroleum reserves, PEMEX has reduced its crude petroleum production in the last few years. Other reasons for the decrease in production are lack of exploration activities, investment, and development of new projects.
In 2007, over a billion dollars were invested in exploration operations in Mexico’s mining sector. Experts believe that as long as global metal prices increase, investment in the Mexican metal mining industry will continue. In 2012, investment by mining companies will likely amount to $7.6 billion.
About 209 foreign mining companies are operating mineral and metal mines in Mexico, the majority of which are Canadian. The mining industry directly employs 328,000 people, and has generated 26,000 jobs in 2011 and 18,000 more jobs this year. Recent trends reveal that the global mining industry is in the middle of a price boom, with the record-breaking gold and silver prices. This boom is expected to continue for a couple more years, resulting in many important expansion projects in Mexico. Experts foresee that by 2015, the CAGR of mineral production will increase by 3.2% and mineral production volumes will increase from 300 million to 400 million t.
The economic growth of Mexico in the coming years will be closely tied to that of the USA, as USA is its main commercial partner. To further attract foreign and domestic investment, the government has allowed 100% equity and private ownership for mineral exploration, development and production. The National Mining Development Plan is another measure taken by the government to allow private companies to mine minerals that were accessible only to the government, such as iron ore, coal, phosphorous, potassium, and sulphur.
Thanks to all these efforts taken by the Mexican government and the vast natural resource reserves, the country’s mining industry is expected to grow stronger in the coming years.
Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.