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Mexico’s mining sector sees foreign investment surge

Bnamericas
Mexico’s mining sector sees foreign investment surge

Foreign direct investment (FDI) in Mexico’s metallic mining sector surged in Q1, following last year’s pandemic-related slump.

FDI in the quarter reached nearly US$1.1bn, almost four times the US$291mn in 1Q20 and up from US$344mn for the whole of 2020, according to latest government data.

The Q1 figure is higher than the full-year FDI data recorded each year since the US$2.31bn in 2014. Spending peaked at US$5.44bn in 2013.

SPENDING REBOUND

The sharp Q1 rise follows a tough year for mining in 2020, when the COVID-19 pandemic led to mass mine suspensions in Mexico in April and May.

While operations restarted in June, spending on growth and optimization projects and maintenance was hampered by new health protocols aimed at stemming the spread of the virus.

A rebound is expected this year, according to BNamericas’ Mining Capex 2021 report, with 29 major producers with Latin American assets forecasting total spending of US$56.2bn, up 25% from US$44.9bn in 2020.

Companies with Mexican assets forecasting higher spending this year include Newmont, Fresnillo, Pan American Silver and Agnico Eagle Mines.

Firms are also planning to advance a string of projects this year.

Assets involving foreign investment and due for first production in 2021-22 include Fresnillo and MAG Silver’s US$440mn Juanicipio silver-gold project, Orla Mining’s US$134mn Camino Rojo gold asset (pictured), Alamos Gold’s US$137mn La Yaqui Grande gold project and Las Chispas, a US$164mn silver-gold project being developed by SilverCrest Metals.

US-listed Southern Copper, a subsidiary of Mexican conglomerate Grupo México, also plans to start production at its US$159mn Pilares copper project in 2022.

Mexico hosts at least 25 mining projects due for first production by 2028, requiring total capex of US$7.82bn.

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