Mexico is a major economic power in Latin America, with relatively developed industrial and agricultural sectors. Its industrial sector is highly diversified, and the output value of its mining and manufacturing industries accounts for 30% of the country’s GDP. Key industries include petroleum and related refining and petrochemical products, as well as mining, automotive, textile, and chemical industries. Agriculture contributes about 9% to the country’s GDP. Mexico is an important global producer of minerals, boasting abundant mineral resources. Among these, silver, petroleum, graphite, natural soda ash, and wollastonite rank among the world’s top producers.
In 2007, influenced by a significant rise in global mineral prices and the recovery of the U.S. economy, Mexico’s gross domestic product (GDP) grew by 3.3%, reaching 1.89 trillion U.S. dollars. The value of mining output increased by 2.5%.
    I. Resource Reserves
Mexico boasts abundant mineral resources. Its energy minerals include petroleum, natural gas, uranium, and coal; its metallic minerals encompass iron, manganese, copper, lead, zinc, gold, silver, antimony, mercury, tungsten, molybdenum, and vanadium, among others; and its non-metallic minerals comprise sulfur, graphite, wollastonite, natural alkali, and fluorite, among others (Table 1). Among these, the following minerals rank among the world’s top reserves: silver ranks second globally; copper, graphite, and natural alkali each rank third globally; sulfur and barite each rank sixth globally; molybdenum, lead, and zinc each rank seventh globally; manganese ranks eighth globally; and petroleum ranks seventeenth globally.
Mexico boasts abundant oil and gas resources. According to estimates from the 14th World Petroleum Congress, its recoverable conventional oil reserves stand at 12.8 billion tons, ranking it eighth globally, while its recoverable conventional natural gas reserves amount to 5.96 trillion cubic meters, placing it 13th worldwide. Furthermore, according to a 2000 assessment by the United States Geological Survey (USGS) of globally undiscovered oil and gas resources, Mexico’s untapped oil reserves are estimated at 3.1 billion tons, and its untapped natural gas reserves are estimated at 1.39 trillion cubic meters.
According to a 2008 report by the U.S. magazine "Oil & Gas Journal," as of the end of 2008, Mexico's proven and recoverable oil reserves stood at 1.439 billion tons, ranking it 17th worldwide; its proven and recoverable natural gas reserves totaled 372.708 billion cubic meters, placing it 31st globally. The major oil- and gas-bearing regions include the Northeast Gas Region, the Tampico Oil Region, the Veracruz Oil and Gas Region, and the Southern Oil and Gas Region.
Coal resources are primarily concentrated in the state of Coahuila in the northeast and the state of Oaxaca in the south. Gold deposits are mainly found in the Central Plateau and the Sierra Madre Occidental; the largest gold mine is the Real de Oro mine in the state of Mexico. The Sierra Madre Occidental region holds reserves of nonferrous metals such as lead, copper, manganese, antimony, tungsten, tin, bismuth, and mercury, making it Mexico’s most important area for the distribution of nonferrous metal resources.

    II. Mineral Exploration
Since 2002, Mexico has been steadily increasing its investment in the mining sector (excluding oil and gas) (Figure 1). In 2007, mining investment reached US$1.53 billion, representing a 20.9% increase over 2006. Of this amount, exploration investment totaled US$189 million.

In 2007, Mexico had a total of 204 mining companies conducting exploration for 410 projects.
In 2007, Mexico had 292,000 mining industry workers, a 4.7% increase from 2006.
In 2007, Mexico’s national oil company invested $12.3 billion in exploration and development, resulting in a total of 15 hydrocarbon discoveries: five oil discoveries—four onshore and one offshore—and ten gas discoveries—seven onshore and three offshore. The majority of these hydrocarbon discoveries were located in the Gulf of Mexico, the state of Veracruz, and the Burgos Basin in the northern region.
In 2007, a total of 659 new wells were drilled, including 49 exploration wells and 610 development wells.
    III. Production and Consumption of Mineral Products
Mexico is a major global producer of minerals, ranking among the world’s top producers in several mineral commodities. Specifically, its silver and bismuth production ranks second globally, and its celestite production ranks third globally. Other minerals with leading global production levels include cadmium, cement, copper, fluorite, gypsum, manganese, molybdenum, salt, sulfur, petroleum, and zinc.
Mexico ranks sixth and twelfth in the world in oil and natural gas production, respectively. In 2007, Petróleos Mexicanos (Pemex), Mexico’s national oil company, reported total revenues of 112.2 billion U.S. dollars.
In 2007, world prices for mineral products generally rose, and the output of most metallic and non-metallic mineral products in Mexico increased to varying degrees (Table 2).

    1. Major energy minerals
    Coal In 2007, Mexico's coal production increased by 9.2% compared to 2006, reaching 11.887 million tons. The primary producer is Minera Carbonifera Rio Escondido (abbreviated as Micare). The thermal coal produced by Micare mainly comes from two open-pit mines and three underground mines located in the Nava region of Coahuila state.
    Oil and natural gas Mexico is one of the world’s major oil-producing countries. In 2007, its oil production fell by 5.5% compared to 2006, reaching 173 million tons, accounting for 4.4% of global total production and ranking sixth worldwide. Natural gas production stood at 46.2 billion cubic meters, an increase of 7.9% over 2006. The country’s leading oil producer is Petróleos Mexicanos (Pemex), which ranks 11th among the world’s 50 largest oil companies. In 2007, Mexico had a total of 352 producing oil fields, with 6,280 production wells and 215 offshore production platforms. Eighty-two point one percent of Mexico’s oil production comes from offshore fields. The largest oil field is Cantarell, accounting for approximately 48% of Mexico’s total oil output. In 2007, Pemex’s oil production totaled 173 million tons, including 153 million tons of crude oil. Among crude oil production, heavy oil accounted for 67.5%, light oil for 27.7%, and extra-light oil for 4.8%; condensate production reached 20 million tons. Natural gas production amounted to 62.614 billion cubic meters, of which associated gas represented 43.1% and non-associated gas 56.9%.
    2. Major metallic minerals
    Copper In 2007, Mexico’s copper production reached 355,500 tons, representing a 2.4% increase over 2006. The Mexican Mining Group is Mexico’s largest copper producer, accounting for 79% of the country’s total copper output. The two largest copper mines are Cananea and La Caridad, both located in the northern state of Sonora. Cananea’s refined copper output was 91,000 tons. In 2007, a newly commissioned mine was the copper deposit operated by Canada’s Frontera Resources in Alamo, Sonora, with an annual output of 24,400 tons. Currently under development are several projects: the Arco project operated by the Mexican Mining Group in Ensenada, Baja California, which is scheduled to begin production in 2012 and is expected to yield 190,000 tons of copper and 3.75 tons of gold annually; and the El Boleo project developed by Baja Mining in southern Baja California, with an investment of US$568 million, is projected to start production in 2009, producing 55,800 tons of copper, 6,300 tons of zinc, and 1,535 tons of cobalt annually, with a mine life of 25 years.
    Gold In 2007, Mexico’s gold production surged to 47.71 tons, representing a 32.9% increase. The growth was primarily driven by the El Sauzal mine operated by Goldcorp Inc., which produced 9.5 tons of gold—a 2.4% rise compared to 2006. This mine accounted for 20% of Mexico’s total gold output. Additionally, the Ocampo mine in Chihuahua, operated by Gammon Lake de México S.A. de C.V., began pilot production in February 2006 and entered commercial development in January 2007, yielding 4.8 tons of gold in 2007. In 2007, Goldcorp’s Los Filos mine in Guerrero state also came on stream, with an annual gold production capacity of 9.3 tons. Meanwhile, Minera Penmont’s La Herradura mine in Caborca, Sonora, produced 6.1 tons of gold in 2007. The La Cienega mine, located in Durango state, recorded a mine production of 4.47 tons.
    Silver Mexico is the world’s second-largest producer of silver, trailing only Peru. In 2007, its silver output reached 3,135.43 tons, representing a 3.5% increase over 2006. The Proano mine in Zacatecas, Mexico’s richest silver deposit and the world’s second-largest silver mine, produced 1,043 tons in 2007, accounting for 33.3% of Mexico’s total silver output. In 2007, Canada’s Pan American Silver Corp. brought its Alamo Dorado mine into operation, producing 118 tons of silver and 0.42 tons of gold. Also in 2007, the company’s La Colorada mine in Zacatecas saw a 14% increase in production, reaching 180 tons. Due to depleting reserves, Mexico’s mining group continued exploration at its silver mine in Taxco in 2007, although operations were temporarily suspended to prevent disruptions.
    Lead and zinc Mexico is one of the world’s leading producers of lead and zinc. In 2007, Mexico’s lead mine production increased by 1.6% compared to 2006, reaching 137,100 tons. The Naica mine in Zacatecas State ranked first nationwide in lead production, with an output of 28,000 tons in 2007, accounting for 20.4% of Mexico’s total lead production.
In 2007, Mexico's zinc production declined by 3.6% compared to 2006, reaching 452,000 tons. The Charcas mine, located in the state of San Luis Potosí and owned by the Mexican Mining Group, is Mexico's largest lead mine, with a lead output of 64,000 tons—the highest in the country, accounting for 14.2% of Mexico's total lead production.
    Molybdenum In 2007, Mexico's molybdenum production reached 6,491 tons, an increase of 157.7% over 2006. Molybdenum is primarily a byproduct of copper mining, and the main producing mine is the La Caridad porphyry copper deposit located in Sonora State, accounting for approximately 98% of Mexico's molybdenum output.
    3. Major non-metallic minerals
Mexico is a major global producer of non-metallic minerals. In 2007, the output value of the non-metallic mining sector grew by 8.4%, accounting for 7.2% of Mexico’s total mining output value. In 2007, diatomaceous earth production increased by 31.2%, with the primary producing mine located in Zacoalco de Torres, Jalisco. Other minerals that saw production growth include phosphate, which rose by 88%; gypsum, up by 13.9%; and kaolin, up by 0.9%.
    Barite In 2007, Mexico's barite production declined to 185,900 tons, a decrease of 6.9% compared to 2006. The main producing mine is the Galeana mine located in the state of Nuevo León, which has an annual barite production capacity of 400,000 tons.
    Fluorite Mexico is the world’s second-largest producer of fluorite. In 2007, Mexico’s output was 933,000 tons, a decrease of 0.3% compared to 2007. The Minera las Cuevas mine is Mexico’s largest fluorite mine, with an annual production capacity of 430,000 tons. The Fluorita de Rio Verde mine has an annual production capacity of 160,000 tons.
    Graphite Mexico is the world’s fifth-largest producer of graphite. In 2007, its graphite production totaled 9,900 tons, a decrease of 16.1% compared to 2006. Seventy-five percent of Mexico’s graphite is produced in the city of Hermosillo, Sonora.
According to the June 2007 edition of the UK’s “BP Statistical Review of World Energy,” Mexico ranks 15th globally in energy consumption. In 2007, Mexico’s primary energy consumption reached 155.5 million tons of oil equivalent, representing a 2.7% increase over 2006. Among its primary energy consumption structure, petroleum and natural gas ranked first, accounting for 57.4% and 31.3% respectively; coal came next at 5.9%, followed by nuclear energy at 1.5% and hydropower at 3.9%. In 2007, Mexico’s petroleum consumption totaled 89.2 million tons (Table 3), up 2.8% from 2006; natural gas consumption reached 54.1 billion cubic meters, an increase of 5.3% over 2006; coal consumption amounted to 15.31 million tons, up 1.1% from 2006. Consumption figures for other major mineral products are shown in Table 3.

    IV. Trade in Mineral Products
In recent years, the Mexican government has pursued an active policy of opening up to the outside world and promoting free trade, encouraging the export of domestic products and easing import restrictions. As a result, Mexico’s foreign trade volume has grown significantly, making it the world’s eighth-largest trading nation and the largest in Latin America. In 2007, Mexico’s total trade exports amounted to 271.8 billion U.S. dollars, with its main export commodities including crude oil, automobiles, auto parts, coffee beans, vegetables, mineral products, steel, chemical products, and machinery. Total trade imports reached 260.6 billion U.S. dollars, with the primary imported goods being automotive materials, electrical appliances, chemical products, food, beverages, pulp, textiles, and petrochemical products. Mexico’s major trading partners are the United States and Canada, followed by Germany, Japan, South Korea, Italy, France, Spain, Chile, and Brazil.
In 2007, Mexico’s exports of energy and mineral products totaled 42.8 billion U.S. dollars, accounting for 15.7% of Mexico’s total export value.
In 2007, Mexico’s non-energy mineral product exports totaled US$9.469 billion, accounting for 3.5% of Mexico’s total export value. Among these, metal mineral products accounted for US$8.6 billion, while non-metallic mineral products accounted for US$869 million. The main mineral products exported included iron ore, silver, copper, and zinc—among which iron (including all types) ranked first, representing 29.0% of the total value of mineral product exports. Silver came in second, accounting for 20.4% of the total value of mineral product exports; copper exports represented 14.3%; and zinc exports accounted for 6.5%.
In 2007, Mexico’s imports of mineral products declined by 2.4% to US$7.627 billion (excluding oil and gas), accounting for 2.9% of Mexico’s total import value. Among these, exports of metallic minerals totaled US$6.119 billion, while non-metallic mineral exports reached US$1.508 billion. Iron (including all types) ranked first in exports, with shipments amounting to US$1.543 billion; aluminum imports totaled US$1.857 billion, and copper imports reached US$9.47 billion. Seventy percent of Mexico’s mineral products (excluding oil and gas) were primarily exported to the United States, followed by Chile, Canada, and Venezuela. Furthermore, 46% of Mexico’s mineral products (excluding oil and gas) were imported from the United States.
Mexico is the world’s seventh-largest oil exporter, and oil export revenues account for roughly one-third of its national income. In 2007, Mexico’s oil exports totaled 98.1 million tons, including 91 million tons of crude oil and 7.1 million tons of refined petroleum products. Of these exports, 77.6% were destined for the United States, followed by Spain (8%) and the Netherlands (6%).
    V. Mining Policy
Since the 1990s, the Mexican government has made a series of adjustments to its laws and regulations related to the mining industry. In 1990, it adopted amendments to the Mining Law enacted in 1975. In 1992, a new Mining Law was passed, aimed at attracting foreign investment. The newly enacted Mining Law removed preferential treatment for ore-processing plants, extended the duration of exploration concessions from three years (as stipulated in the 1975 law) to six years, and increased the term of mining concessions from the previous 25 years to 50 years. Moreover, the law lifted earlier restrictions on the exploration of sulfur, phosphorus, potassium, iron, and coal in national mineral reserve areas and continued to reduce the size of these reserve zones. Further revisions were made in 1996 and again in April 2005. Today, Mexico’s mining sector is fully open to both domestic investors and foreign companies. The duration of exploration concessions has been extended from the previous six years to 50 years, and these concessions can now be renewed—unlike before when they could not be extended—and include priority rights to engage in processing and ore beneficiation. The minimum lease period for mining and exploration activities is now as short as six months, and such leases can be freely transferred. This Mining Law covers aspects ranging from exploration and mining development to ore processing, allowing private entities to hold 100 percent ownership of exploration and mining operations—even including the production of minerals previously owned by the government, such as sulfur, phosphorus, potassium, iron, and coal. However, oil and gas resources as well as radioactive materials remain exempt from this law. Additionally, previous restrictions on exploration along coastlines, continental shelves, border regions, and islands have been lifted. These reforms have had a profound impact on Mexico’s mining sector, significantly improving the investment climate and making Mexico’s mining industry highly promising for future development. Following Mexico’s accession to the North American Free Trade Agreement, the country has signed multilateral and bilateral free-trade agreements with other Latin American nations and the European Union. The multilateral trading system has not only spurred rapid growth in Mexico’s export-oriented industries but has also brought about substantial changes in Mexico’s investment and financial sectors, thereby providing strong impetus to economic development.
In 1995, 1996, 1998, 1999, and 2005, Mexico revised its Foreign Investment Law to streamline the registration and approval procedures for foreign investments and update certain provisions, thereby providing foreign investors with greater certainty and higher transparency. In 2005, the Mining Law was newly revised and improved, allowing 100% privately owned companies to engage in the exploration and development of coal, iron ore, phosphorus, potash, and sulfur—though this does not include oil resources or radioactive minerals. In 2007, plans were made to reform the energy sector and open it up to private capital investment in the oil and gas industries; however, no concrete results have yet been achieved.
    VI. Outlook
In its 2006-2016 oil outlook, Mexico’s Ministry of Energy projected that by 2016, Mexico’s oil production would reach between 2.1 and 3.4 million barrels per day. Under the best-case scenario, average production could reach 3.255 million barrels per day, with a peak of up to 3.4 million barrels per day in 2016. Under the worst-case scenario, average production could still amount to 2.5 million barrels per day, with a peak of up to 2.1 million barrels per day in 2016. Even under the worst-case scenario, investment would still be required at 157 billion pesos; most of the production would come from the Chicontepec field and other deepwater fields. Currently, Mexico’s national oil company (Pemex) is in discussions with international oil companies such as BP to seek their assistance in exploring and developing deepwater oil and gas reserves.
China is also actively involved in mining investments in Mexico. In 2007, Jinchuan Group and Mexico’s Tyler Resources Inc. invested US$214 million in the Bahuerachi project in Chihuahua State for exploration. The project is expected to produce copper, gold, molybdenum, silver, and zinc.
    Main References:
???1. Alberto Alexander Perez, The Mineral Industry of Mexico. USGS. Mineral Yearbook, 2007
2. British Petroleum Company. BP Statistical Review of World Energy, London, June 2008
3. New estimates boost worldwide oil and gas reserves. Oil & Gas Journal, Dec. 22, 2008
4. International Energy Outlook, 2008. http://www.eia.doe.gov/oiaf/ieo/index.html
5. World Metal Statistics, 2008