Mexico is a country best known for silver mining; however, we cannot ignore the long history of commercial and artisanal gold production that has been written over the last 500 years. In fact, gold and silver account for more than 50 percent of the country’s total metals output and Mexico is the world’s 9th biggest gold producer.
Gold production in Mexico has stayed relatively stable over the past decade. This somewhat contrasts with the fact that very few new mines have opened over the last few years, owing to a combination of an uncertain gold price environment and the mining companies’ focus on reducing costs. Of course, we should also look to even more recent data that gives us some insight into the impact of the pandemic on Mexican’s gold production. According to INEGI, gold production in Mexico increased to 6036 kg in August from 5798 kg in July of 2020. Read on to learn more about this rebound in Mexico gold mining.
Mexico’s biggest gold producing states and gold mines
As mentioned above, Mexico is a top gold-producing country. Several active mines can be found throughout the states of Mexico. Data provided by INEGI in August 2020 reveals that the top gold-producing states are as follows (Figure 2):
La Herradura is currently Mexico’s top gold mine, having produced around 482.7k oz of gold in 2019 (Table 1). According to Mexico’s Mining Chamber CAMIMEX, in 2019, the ten largest operational gold mines in Mexico are:
The effect of the pandemic in gold production
During the first two months of the lockdown period, Mexico’s government declared the mining sector as a non-essential activity. This will most likely affect the 2020 overall gold production figures, i.e., the gold production in 2020 is expected to be lower than previously anticipated. It should be reinforced that in 2020 the mining activity went through periods of inactivity owing to the Covid-19 world pandemic. As a result, gold production in Mexico decreased during the first half of 2020. As of right now, the mining industry is active and going through a recovery process. For this reason, data from last year does not give significant insight and should not be used as a reference or be compared with 2020 figures to make predictions about Mexican’s gold production in the future.
On the other hand, while the COVID-19 crises heavily impacted the demand for industry metals, gold has seen sharp price increases during 2020. In last April, gold passed US$1,700/oz for the first time since 2013 and on May 18 it hit a high of US$1,756.90/oz. Presently, higher prices are encouraging investors and mining operators to increase their global gold production.
So, what is the future for gold mining in Mexico?
The pandemic situation we are currently living in undoubtedly affected Mexico’s gold production. This was true at least during the first half of 2020. Currently, Mexico is living a period of renewed production that is triggering fresh investment making it the country with the largest number of gold projects in the Latin America region. In fact, many of our friends are part of this trend. Vangold Mining, Mammoth Resources and Riverside Resources have active gold projects in Mexico.
Indeed, experts have noted that around 70 percent of Mexico shows great geological potential for mining, making the country the world’s fourth-largest foreign direct investment destination for mining. Mexico also is the United States’ second-largest export market and the third-largest trading partner.
Whatever the future holds it is unquestionable that Mexico remains a country abundant in untapped precious metals and a prime location for commercial production. For all these reasons, it just might be the perfect time to invest in a company with assets in Mexico.
Read More in:
Mexican Mining Center: https://bit.ly/3lU4GWM
Investing News: https://bit.ly/3lGHdsl
More about our friends in Mexico:
Mammoth Resources: https://bit.ly/2KaZobw
Vangold Mining: https://bit.ly/3pGffz6
Riverside Resources: https://bit.ly/2UAuviD