Mexico Mining Market Expected To Witness A Substantial Growth Of $2.30 Billion By 2030: Grand View Research Inc.
The Mexico
mining market is expected to
reach USD 2.30 billion by 2030,
according to a new report by Grand View Research, Inc, expanding at a CAGR of 2.9% over the forecast period.
The growth of the industry is attributed to increasing demand for precious
metals, which account for the major share of the market. Moreover, the growing
demand for metals such as copper, zinc, and lead that find various uses in
electrical & electronic applications are further fueling the market growth.
The mining sector is getting rapid
exposure of technological advancements such as automation and digitization.
These include the introduction of automated tunnel drilling and drilling
systems, autonomous vehicles, drone, and intelligent sensors, which are
designed to increase the efficiency and management of mining operations and
reduce wastage.
For instance, in July 2022, Fresnillo,
one of the world’s largest silver producers, placed an order to Eprico for
underground mining machines. The order consists of Boltec and Cabletec rock
reinforcement rigs, Boomer face drilling rigs, Simba production drilling rigs,
Minetruck haulers, and Scooptram loaders.
Based on sector, the non-metallic
minerals segment is anticipated to witness the fastest growth rate over the
forecast period. The segment growth is attributed to widespread applications of
products like kaolin, silica, and feldspar in various industries. Growing
investments in the end-use industries of these products is propelling their
demand and thus, mining.
Metal prices in Mexico witnessed a
sharp decline from January to April 2020 owing to a sudden drop in demand
caused by the outbreak of COVID-19. However, post-April 2020, prices recovered
sharply owing to the restart of manufacturing activities with social distancing
norms in place.
To remain competitive, mining companies
are entering into long-term supply contracts with end users. Also, the
companies use derivative contracts to protect them from market volatility.
These fluctuations expose the companies to the risk of opportunity loss and
mark-to-market fair value adjustments. These contracts could include forward
sales, futures contracts, call options, and other derivative instruments.
Increasing demand for precious metals,
non-ferrous, and non-metallic products in the end-use industries such as
construction, automotive, electrical & electronics, and aerospace &
defense are expected to augment the market growth.
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Investments in smart technologies to
control costs and improve efficiency are projected to remain an important trend
over the coming years. The shift toward a low-carbon economy and strict
emission regulations is anticipated to have an impact on environmental standards
and would lead to the scrutiny of mining activities.
Mining holds vital significance for
the Mexican economy. For instance, as of 2021, the mining industry contributed
3% to Mexico’s GDP and 9.6% to its industrial GDP. Furthermore, a growing
number of joint ventures, increasing acquisitions, and rising investments by
giant companies, such as Grupo Mexico, Industrias Peñole, and ArcelorMittal, to
boost their mining operations in Mexico is expected to positively aid the
market growth.
Mexico Mining
Market Report Highlights
- Based on sector, precious metals held a
revenue share of more than 47.0% in 2022 in the market. This market share
is attributed to growing consumer preference for fashionable and luxurious
items
- Mexico has wide reserves of gold and
silver. As of 2021, Mexico stood 7th in the world, in
terms of gold production. In 2021, similar to other prominent gold
producers in the world, Mexico’s gold production fell too, and dropped
down to 100 tons in 2021 from 101.63 tons in 2020
- The non-ferrous held second-largest share
of the market. Its growth can be attributed to increasing penetration of
metals in electric vehicles (EVs). Growing EV production further propels
the demand for metals such as lead, copper, zinc, and molybdenum
The Mexican mining industry holds
major importance at a global level. For instance, the Mexican export of
minerals and ores to the world was around USD 18 billion in 2021. Growing
demand for minerals is propelling investments in the country. For instance, in
2021, Industrias Peñoles invested USD 40.7 million in exploration, which was
21% more than the previous year. In this, USD 18.2 million was allocated for
new projects and USD 22.5 million for the exploration of mines to replenish and
increase the reserves.
Metals such as copper, zinc, and lead
find various uses in electrical & electronic applications. Growing demand
for electronics is propelling its production in Mexico. For instance, in July
2022, Samsung announced investing USD 500 million in two of its plants in
Mexico. The investment is expected to help the company to boost the production
of household appliances.
The market is competitive with the
presence of various established players as well as small and medium players.
The industry is facing acquisitions and capacity expansions to stay ahead of
the competition. For instance, in March 2022, Asia Broadband (AABB), U.S. based
resource company announced that it has acquired the Zodiac Gold Mine project in
Buen Pais. Jalisco, Mexico. This acquisition is expected to help Asia Broadband
(AABB) to enter the Mexico mining market.
Investments in smart technologies to
control costs and improve efficiency are projected to remain an important trend
over the coming years. Furthermore, the growing shift toward a low-carbon
economy has led major economies to enforce strict restrictions on mining
activities. Automation is another key area that is likely to help miners reduce
costs.
Some of the key players in the Mexico mining
market include:
- AHMSA
- ArcelorMittal
- Coeur Mining Inc.
- FIRST MAJESTIC
- Fortuna Silver Mines Inc.
- Frestnillo plc
- GRUPO MEXICO
- Industrias Peñoles
- Newmont Corporation
- Pan American Silver Corp
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