LATIN AMERICA — Mexico has a recognized mining tradition

Mexico has an abundance of mineral resources with some of its country’s mines on a par with the world’s best. Two semi-parallel mountain systems run the length of the country from north to south, the Eastern Sierra Madre (1,350 km) and the Western Sierra Madre (1,250 km). In the centre of the country’s territory lies the continental massive known as the Mexican Central Plateau, and further to the south is the Balsas depression.

At the southern limits of the Central Plateau, the neo-volcanic cordillera, about 910 km in length, crosses the country. In the southern part of Mexico is the mountain chain known as the Southern Sierra Madre (1,260 km). And the Californian mountain chain, with an average width of 75 km, runs the whole length of the Baja California Peninsula in Mexico’s northwest. Mexico has a recognized mining tradition. Mining was an important activity during the three centuries of colonial rule, and it was so brutal and intense that some thought that the country’s precious metals had been exhausted. Nothing could be further from the truth. As Mexico has continued to mine its resources, production has increased year after year.

The geographer Alexander von Humboldt (1769-1859) said that Mexico was a silver plate. Silver is abundant in many parts of the country, and for a long time Mexico has been among the world’s leading producers of the precious metal.

Indeed, in 1991, Mexico recovered first place in world silver production, along with first place in celestite and sodium sulphate. It is also among the world’s 11 top producers of 16 other minerals: bismuth (2nd); antimony, cadmium, fluorite and graphite (3rd); mercury (4th); arsenic (5th); zinc (6th); barite, lead, molybdenum and sulphur (7th); salt and feldspar (8th); and copper and gypsum (11th).

By 1991, non-ferrous industrial metals and precious metals (gold and silver) together accounted for the greatest percentage of the country’s mining and metallurgical production, and their value accounted for about 60% of the total value of national output. Ore for iron and steel production accounted for 21%, and non-metallic minerals for 19% of total value of mining and metallurgical production.

Different reports estimate that of the country’s total area, only 20% has been adequately explored. Geologically, it is estimated that two-thirds of the country’s territory is likely to contain important mineral deposits, especially if we consider the new processing techniques and the new minerals that are beginning to be quoted on international markets.

As Alfredo Elias Ayub, assistant secretary of mining and basic industries, stated, the government has adopted the necessary measures geared to promote investment in mining. In pursuing this goal, it has facilitated the participation of Mexican and foreign capital and technology. It has placed at the disposal of investors from the social and private sectors larger extensions of land for mining. Red tape in mining administration has been radically reduced. A tax system has been developed making Mexican mining competitive with foreign production. And increased credit and production support have been provided to favor small-and-medium-scale mining producers. Other changes have included making geological and mining information public for the first time. However, the most important change has been the opening of the industry to foreign investment which can now own 100% shares in exploration activities without requiring a permit. Also, 100% foreign investment is allowed in mining operations without the need for a permit for a period of 13 years counted from the date commercial activities begin. This arrangement could even be expanded in the near future.

The Mexican mining and metallurgical sector has for many years been accustomed to competing on the international market and has participated in projects and joint ventures with foreign companies. Because of that experience, the mining sector views the future North American Free Trade Agreement (NAFTA) with optimism and confidence.

We can state that in general terms the leading Mexican mining companies are competitive at this point in time. Consequently, the prospects of NAFTA open up important opportunities for the mining industry, not only from the commercial and investment point of view, but also in many other areas such as human resources, training, exchange of technologies and information, and other fields.

— Sergio Almazan is director general of the Mining Chamber of Mexico.