Mining Development Program 2013-2018

On may 9, the Ministry of Economy of the Federal Government published the Mining Development Program 2013-2018 in the Federal Official Gazette...

Published by:     Villalobos & Moore    Date: 2015-10-17


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On may 9, the Ministry of Economy of the Federal Government published the Mining Development Program 2013-2018 in the Federal Official Gazette. This program develops for the mining sector the objectives of the National Development Plan consisting on the development of strategic sectors and the offering of clear rules to boost the growth of a competitive internal market.
The Program outlines four main objectives: (1) to promote larger levels of investment and competitiveness in the sector, (2) to increase financing, (3) to promote the development of small, medium and social mining, and (4) to modernize institutional regulation and improve procurement procedures related to mining concessions.


Some Statistics on Mexico and the Mining Industry.

Based on the Program:

- Mexico is within the first 10 worldwide producers of 16 minerals.
- Mexico is number 1 in silver production, second in bismuth and fluorite, third in celestine and wollastonite, fourth in lead, sixth in zinc, seventh in gold and tenth in copper.
- In 2012, mining and mining processing constituted 4.9 % of the GDP.
- GDP of the mining sector registered an average annual increment of 3.5 % during 2001-2012, the highest level of the last 3 decades, and higher than the growth level of the entire economy.
- In the same period, investment in the sector reached 30 thousand 800 MDD, at an annual average increase rate of 28.2 %, and a historic investment amount of more than 8 thousand MDD only in 2012, all derived from the positive levels of macroeconomic stability, safety and legal certainty, commercial openness and the mineral resources wealth of our country.
- Mexico is in the fifth place among the most attractive countries for mining investment, after Australia, Canada, Chile and Brazil.

Markets

After a long period of growth where from 2001 to 2012 the minerals price index increased 209.2 % for metals, the economy has entered a less favorable phase.
The World Bank estimates that metal prices shall continue to decrease, that the index of industrial and precious metal prices will decrease 3 % and 9.5 % respectively during 2013-2018.
Additionally, production costs have increased: only from 2010 to 2012, operative expenses of mining companies increased 38.2 %.

Program Strategies

Objective 1. To promote larger levels of investment and competitiveness in the sector.
Strategies:

- Promote Mexico as a mining investment destination.
- Promote diversification in exploration and benefit with emphasis on industrial minerals.
- Increase the quality of information on mining projects to be subject to bidding by the Mexican Geologic Service.
- Generate and provide geological, geophysical and geochemical information.
- Promote mining projects.
- Align programs and instruments of the Ministry of Economy and other official offices with the requirements of the mining industry.

Objective 2. To increase financing.
Strategies:

- Boost the development and consolidation of mining industry procurement.
- Boost major projects.
- Promote the financing of environmental preservation and new technology projects.
- Financially support the commercialization of minerals and concentrates.
- Promote financing of mills and collection centers.

Objective 3. To promote the development of small, medium and social mining.
Strategies:

- Carry out exploration and project evaluation in support of small, medium and social mining.
- Offer financing.

Objective 4. To modernize institutional regulation and improve procurement procedures related to mining concessions..
Strategies:

- Simplify procedures and services, maintaining the Mining Public Registry and the cartography of mining concessions updated, and proposing changes in applicable legal provisions .
- Modernize the procurement of procedures through implementation of technological tools and perfecting electronic tools.

Author:  Martha Angélica Villalobos Murillo
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Of Counsel