Guided by the government’s National Mining Development Plan, Mexico’s mines have seen Foreign Direct Investment (FDI) reach unprecedented levels in recent times, contributing to a truly booming industry.
According to the latest figures released by the Ministry of Economy, it is expected that US$8 billion will be invested into the mining sector in 2013.
Such an amount would mean an increase of 4.6 per cent in FDI compared to 2012 – a year in which the non-oil mining segment doubled the foreign exchange earnings generated by the tourism industry, as well as experiencing a sector growth rate of 9.4 per cent (twice as much as the Mexican economy as a whole).
Furthermore, the predicted increase means that, by the end of 2013, mining will have witnessed four years of consecutive growth, marking a new record.
It is perhaps when you look at the country’s inherent attributes that it becomes easier to understand why Mexico ranks as the world’s fourth most attractive mining investment destination.
Primarily, 70 per cent of Mexican land holds mineral reserves which are suitable for exploration and mining activities. Combine this with the presence of low labour and production costs and it comes as no surprise as to why Mexico is proving an extremely alluring market.
“These [investment] figures are the result of very important growth which is mainly due to the geological potential that the country has, because it is the first producer of silver around the world, providing about 20 per cent of production worldwide, and is within the top 10 producers of gold,” explains the President of
Fresnillo, Octavio Alvídrez.
“We have been a mining country since colonial times, contributing to the building of our country and holding great potential to continue as a key industry for the development of Mexico.”
Indeed, the mining industry has had a massive positive multiplier effect in the country – supplying around 330,000 jobs directly and 1.6 million indirectly – while bringing with it immeasurable socio-economic benefits through its many years of development.
“Our company has a century-old tradition,” says Mr Alvídrez. “In fact, Fresnillo, our emblematic mine, has operated intermittently since the mid-16th century and permanently, since the early 1900s”
Today, Fresnillo – which has over time become the world’s largest primary silver company and the country’s second largest gold producer – exists as a prime example of why there is no shortage of investors interested in taking advantage of the good returns that are now characteristic to the industry.
Throughout its mining success story, Fresnillo has always placed a priority on creating long-term value for its shareholders, believing that the success of the company is dependent on its shareholders and that value creation is instrumental to the growth of the business, rather than just an outcome of it.
With this in mind, following decades as a profitable and reputable company with proven expertise in the mining value chain, from exploration to mine development and operation, Fresnillo plc listed on the London Stock Exchange five years ago in a move to increase investor confidence further.
“Since its inception in 2008, Fresnillo plc has distinguished itself by offering the investor a very important growth platform,” explains Mr Alvídrez.
“We have distinguished ourselves for not disappointing investors and for growing at promised rates, maintaining a balance between growth and returns. That is what gives a solid foundation for the investor and the confidence to invest.
“For the year 2018 the goal is to generate 65 million ounces of silver and more than 500,000 ounces of gold a year.”
Such ambition is what defines Mexico’s mining industry at the moment, with the growth outlook for the sector looking very positive and development expected to accelerate even further once the global economy fully recovers.
And while development is inevitable, true to its values, Fresnillo remains at the heart of the country’s efforts to ensure growth happens in a sustainable way.
“We can say that we belong to a group of companies that has been an example to follow in the Mexican mining industry by good practice not only in engineering, but in the care of the environment and relationship with the communities where we operate.”
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