When you think about the mining industry in Latin America, countries like Chile and Peru are often first to come to mind, and rightly. However, the Mexican mining industry is up there with the top countries for international investment due to its vast amount of precious minerals and metals. If you’re looking to get in on the action and invest overseas to reap the benefits of Mexico’s rich land, here is a brief overview of the mining industry in Mexico and why it could be a viable option for your business.
Mining Statistics in Mexico
Mexico is the largest silver producing country in the world, accounting for nearly 20% of silver production worldwide. Not to mention it is also the 8th largest gold and 12th largest copper producing country in the world.
Thanks to its favorable geology, Mexico is home to many minerals and metals such as fluorite, zinc, lead, bismuth, and sodium amongst others, making it one of the top 20 mineral-rich countries in the world. As a result, in 2014, the Behre Dolbear Group ranked Mexico as the fifth most attractive country for investments in the mining industry.
Although Mexico is a fertile country that remains relatively unexplored there are even more attractive reasons that make investing in Mexico a lucrative and worthwhile decision.
Flexible Legal Requirements
Mexico offers a flexible legal framework for mining companies. The mining industry in Mexico is regulated by the Mexican Mining Law of 1992. This law allows foreign investors to extract minerals and retain 100% ownership of invested capital stock. There are no restrictions on foreign ownership allowing foreign investors to explore and extract all types of natural resources with the exception of oil and nuclear energy. In addition, Mexico’s free market economy translates to limited government intervention. These flexible legal requirements are encouraging many foreign investors to begin the process of setting up mining companies in Mexico.
Skilled and Cost-Effective Labor Force
Mexico has a large supply of skilled labor force, especially in the mining industry as it’s an important source of income for the country. In addition, Mexico offers some of the lowest wages compared to the rest of Latin American countries.
Mexican Free Trade Agreements
In 1997, Mexico and the EU signed a free-trade agreement and then the floodgates were opened. In the following 15 years Mexico signed tons of trade agreements, not only within Latin and North America, but with global players such as Japan and Israel. The potential of the Mexican labour force to produce high-quality, low-cost goods had been unlocked. Mexico’s international outlook can be seen through their 12 FTAs spanning 46 countries. Current successful trade negotiations and effective future trade agreements will ensure the continued growth of Mexico into the future. These free-trade agreements allow foreign companies operating in Mexico to easily export their products around the world.
One of our team members at Biz Latin Hub will be happy to answer any questions you have in regards to the Mexican mining industry. In addition, we are able to assist you with your companies entry into Mexico. Please contact us today for more information.