Mexico's miners to invest US$5.3bn in 2018
Investment in Mexico's mining sector is set to rise by almost US$1bn in 2018, according to industry chamber Camimex.
Total investment is forecast at US$5.26bn, up from the US$4.30bn spent last year and the six-year low of US$3.75mn in 2016, Camimex said in its annual report.
The 2018 figure is the highest since 2013 (US$6.58bn), but remains well below the 2012 peak of US$8.04bn.
RISING SPENDING
Equipment purchases are the biggest single area of spending in 2018, at US$1.04bn, up from US$731mn last year.
This is followed by investment in new projects, at US$921mn, up from US$626mn, while spending on expansions is forecast at US$495mn, rising from US$462mn.
Mexico's pipeline comprises projects, including optimizations and expansions of existing assets, with capex totalling more than US$7bn due to begin production by end-2025.
Other significant areas of spending are maintenance (US$499mn, up from US$435mn) and the environment (US$248mn, up from US$176mn).
EXPLORATION
Spending on exploration, which is key to the long-term health of the sector, is also on the rise, with US$685mn planned, up from US$612mn last year.
In part, the rise reflects increasing exploration planned by Fresnillo, at US$200mn in 2018, up from US$141mn last year.
ANALYSIS
Increased overall investment and exploration spending reflect growing confidence in the sector and a recovery which appears to be gaining traction.
In large part, this has been driven by metals prices, with Mexico's main products, gold, silver, copper, zinc and lead, all seeing increases in 2017, although gold and silver are currently trading around 12-month lows.
Looking ahead, investment in 2019 will depend to a large extent on how the sector responds to the actions of left-wing president-elect Andrés Manuel López Obrador (AMLO), who will take office in December.
While mining bosses including Grupo México CEO Germán Larrea were outspoken opponents of AMLO in the election campaign, both sides have since sought to overcome their differences.
Mexico is the world's largest silver producer and a top 10 miner of gold, copper, zinc, lead and molybdenum.
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