Mexico’s mining sector to reach $17.8bn by 2020 on zinc prices, strong pipeline

Mexico’s mining industry is expected to stage one the strongest recoveries in Latin America over the coming years, thanks to a strong pipeline of projects across mineral sectors, competitive operating costs, supportive government policies and rising metal prices, a new report says.

Gold and silver sectors will remain relatively fragmented, as larger miners sell assets to lower debt and reduce exposure to operational risk in the country.

According to analysts at BMI Research, the particular composition of the Latin American country’s mining industry will help it reap benefits quicker than other nations, as mineral prices for its key domestic commodities — silver, gold and zinc — are expected to perform well until at least 2020.

Some signs of that speedy recovery are already evident, with mining investments in the country forecast to increase almost 50% this year to $5.5 billion, from the $25.4 billion invested in Mexico’s mining sector in the previous 12-month period, as shown in a government report released in September.

“We forecast Mexico’s mining industry value to average 3% year-on-year growth over 2017-2021 compared to an average 1.6% across the Americas,” BMI said in the report released Thursday.

It means the country’s industry value will increase from $15.7bn in 2016 to $17.8bn by 2020.

Most of the local industry’s expansion in the next five years will be led by gold, a sector that currently accounts for roughly 17% of the country’s mining industry value, followed by silver (16% of Mexico’s MIV) and zinc (9%).

However, the experts warn, the gold and silver sectors will remain relatively fragmented, as larger miners divest from assets in an effort to lower debt and reduce exposure to operational risk in the country. At the same time, they noted, climbing prices and high-grade deposits will encourage juniors to continue developing projects.

Fonte: MINING.com