--Mexican mining sector seen receiving a record $7.6 billion in investment this year
--Mining companies expect investment to continue rising in 2013
--Industry leaders hope upcoming administration upholds current mining policies
By Jean Guerrero
QUERETARO, Mexico--Investment in Mexico's mining sector is expected to reach an all-time high this year of $7.6 billion, up 36% from 2011, and to keep rising in 2013 despite a decline in international prices for most metals, top mining industry leaders said Tuesday.
Copper mining company Grupo Mexico SAB (GMEXICO.MX) estimates its investments in Mexico will increase about 40% next year compared with 2012, said President Xavier Garcia de Quevedo, speaking at a conference in the capital of the central mining state of Queretaro.
The company's total mining investments will be $1.76 billion this year, compared with $715 million in 2011. About $1.05 billion of the 2012 investments were in Mexico. Grupo Mexico also has mining operations in Peru and the U.S.
Mr. Garcia de Quevedo said the world supply of copper hasn't been meeting demand, and that Grupo Mexico aims to ramp up production.
Company officials said Mexico has become more of a mining country than agricultural, as it is often perceived, and that the investments it receives widely benefit its economy. They said they hope the incoming administration of President-elect Enrique Pena Nieto, who is set to take office Dec. 1, will uphold current mining policies.
"We hope there are no modifications, such as new taxes," said Humberto Gutierrez, president of the Mexican Mining Chamber and chairman of mining company Minera Frisco SAB (MFRISCO.MX).
Mr. Gutierrez said despite lower prices this year for precious metals besides gold, prices are still high relative to past years. The value of mine production in Mexico is expected to rise this year as increased output offsets the effect of lower prices, he said. Minera Frisco expects to invest about the same amount of money in mining next year as this year, he added.
The company reported capital expenditures of about $575 million in the first nine months of this year.
Rafael Rebollar, director of metals and chemicals for Mexican mining company Industrias Penoles SAB (PE&OLES.MX), said his company expects investment to stay steady or increase slightly in 2013, with much of it allocated to exploration activities. This year, Penoles invested $1.1 billion in mining, compared with $960 million last year. Penoles is the parent company of Fresnillo PLC (FRES.LN), the world's biggest primary producer of silver.
"Investments are for the long term, we can't be thinking about whether prices are high or low," Mr. Rebollar said. "If mining companies stopped investing in exploration, their resources would run out."
Ramon Davila, general director of the Canadian mining company First Majestic Silver Corp., said he also expects investment in Mexico to stay strong, noting that the company "remains optimistic about silver prices."
Company officials said two of their main priorities for the upcoming year are to improve communication about the benefits of mining and, partly as a result, to amplify access to land.
"We need to improve the image of what we're doing," Mr. Davila said.
A push for competitive energy prices and conservative water use are also priorities, officials said.
Write to Jean Guerrero at [email protected]
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