Our neighbors down south have always been known to be a silver mining powerhouse.
In 2011, Mexico was the top silver producing country in the world with a staggering 152.8 million ounces produced. To put that in perspective, it churned out 40% more ore than its next closest rival, Peru.
But record-setting silver production is only one aspect of this growing mining juggernaut.
It’s a top five producer of lead and ranks ninth in zinc production as well. And the likes of gold and copper development in Mexico have also experienced rapid growth in the past few years.
In fact, according to Mexico’s general coordinator for mining Jimena Valverde, “Mexico is a mining country. The mining industry represents the third most productive activity, after the oil and the tourism industries, and excluding money sent by Mexicans living in other countries. In 2011, mining production amounted to about US$12 billion; very close to the tourism industry’s turnover.”
This recent flurry of activity has also kick-started foreign interest, with total mining investments in Mexico for 2012 expected to top the all-time high of $7.6 billion. That’s up 36% from 2011 and is expected to rise even higher in 2013.
Even Carlos Slim, the world’s richest man according to Forbes, is looking to invest billions into the sector.
As an executive of one of Mexico’s largest mining conglomerates, Rafael Rebollar from Industrias Penoles SAB put it best: “Investments are for the long term.”
But why the sudden interest in Mexico’s mining riches now?
First off, high prices of metals and new technologies make it economic to develop and operate old mines. And companies (mostly Canadian) have helped to re-activate many of Mexico’s centenarian mines, which were previously not economic to operate.
Also, Mexico has molded itself into an excellent place to do business.
In 2010, the Fraser Institute ranked Mexico as one of the most attractive countries for geological business potential, among top global mining destinations, fourth in the world and first in Latin America.
And finally, the country offers political and financial stability, as well as a very attractive tax system, without corporate taxes and royalties.
What’s not to like?
The bottom line is Mexico holds vast mineral resources and they’re open for business. I can see a massive mining boom on the horizon.
It’s time to head down south.
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