About Mexico

Mexico has a mining history that extends back at least 700 years, well before the arrival of the Europeans. In addition to gold and silver production prior to the arrival of the Europeans, the native Mexicans had developed smelting technology to recover copper from oxide mineralization.

Mining has always been important to Mexico, and continues to be so. During 2013 Mexico's share of worldwide production was 4% for gold, 21% for silver, 3% for copper, 4% for zinc, 4% for lead, 4% for molybdenum, and 12% for bismuth. In addition Mexico produces iron, coal, and manganese as well as several non-metallic minerals. Currently mining and smelting in Mexico is just under 3% of the country's GDP. During 2013 it was the fifth highest source of foreign exchange after automobile, electronics, and petroleum exports, and remittances by Mexicans working abroad.

Foreign companies can own up to 100% of a mining project through a Mexican subsidiary. Mexico's tax regime is not as competitive as it used to be and there now is a royalty on production which amounts to 7.5% of "net proceeds" and a 0.5% net smelter return on production of gold, silver and platinum. Mexico's Mining Law is designed to promote mining exploration, although as noted below the administration of the law is somewhat lacking.

While Mexico continues to have a tremendous geologic potential for finding new ore bodies, the country, like most places in the world, does have some problems. About 15% of the population regularly support nationalistic and socialistic politicians, and in some areas it is extremely difficult to convince the population that mining is an overall benefit to society. The administration of mining concessions continues to be woefully under funded and consequently many prospective areas are off limits simply because the responsible government entity has not gotten around to releasing old expired concessions. Organized crime is active in much of the country and although the federal government is vigorously attacking this problem it will be some time before things settle down.

Recently the mining industry in Mexico appears to have been more proactive in government relations and there are some encouraging signs that the government is listening and may be willing to implement some of the changes that industry needs.

Despite the above problems, exploring for new mines in Mexico is still worthwhile. While most of the known mining districts and mineralized areas have been explored, extensions to those districts that may be under post-mineral cover have only recently begun to be explored. Discoveries such as Goldcorp's Camino Rojo and Mag Silver's Valdecañas in Zacatecas, and Almaden Mineral's Ixtaca Zone in Puebla are testimony to the undiscovered potential that Mexico has to offer.