Why mining in Mexico makes sense
Investors often ask if mining is safe in Mexico. We hear the question a lot during our roadshows and presentations, and the good news is that there’s a simple answer.
Yes it is.
Sure, there are parts of the country that face troubles, but the area in which we operate is not one of these. In fact, Mexico is a mining friendly jurisdiction with a favourable regulatory and investment environment.
The country ranked fifth in the world for mining investment in 2015 and the government continues to work to attract foreign and local mining activity.
US based and in particular Canadian mining companies have been operating successfully in many parts of Mexico, including Chihuahua, for over 40 years, however from an exploration point of view, the country can be considered under-explored.
Australia has several public and private exploration companies currently active in Mexico.
1. Red and Green Tape
- Mexico is a member of the World Trade Organization (WTO) and APEC, and is working on streamlining and eliminating trade barriers
- Long mining concessions available (50 years plus additional 50 years)
- 6 year exploration concessions means leases are not “locked up” long term
- Environmental awareness has increased in recent years. Ongoing improvements are taking place to align environmental management with international standards. As in many established mining jurisdictions, mining companies are liable for causing avoidable environmental damage, but the requirements for permitting are less onerous than in other leading mining locations such as Australia and Canada.
2. Investment Opportunity
- Government is pro-foreign investment. It has actively removed barriers and created a legal framework to encourage foreign investment
- No restriction on the level of foreign investment or the movement of money, equipment and personnel across borders
- Ranked fifth best mining investment destination in the world
- Government has announced major infrastructure initiatives including road and rail
4. Access to Labour
- Low labour costs
- Skilled workforce in Chihuahua Province
- Increased focus on community involvement focused on jobs growth and consultation
- There was some publicity around personal safety to miners in early 2015, an armed robbery at a Canadian operated gold mine and several reported kidnappings of mining company executives
- Believed to be the work of drug cartels
- This has been restricted to precious metal operations – not base metal projects
- Government has set up a security task force and deployed federal police and military personnel to trouble spots in response
- The area surrounding Plomosas in Chihuahua Province is not seen as high risk with a major federal highway running between Chihuahua City and Ojinaga on the US border.