Zinc in Mexico

Mining in Mexico started at least over 500 years ago. Today, Mexico is still to be considered one of the largest mineral producers and is contemplated as one of the best destinations for companies who search mineral exploration and mine exploitation. The country’s economy takes pleasure in minerals like silver, gold, bismuth, lead and zinc. Mexico occupies the 6th place in zinc production after China, Australia, Peru, United States and India. This country produces 5.06 percent of world’s zinc and has been producing around 600.000 tons of zinc per year since 2010. Which means that even if not one of the most important producers in the world, Mexico has still a significant impact in the zinc market and zinc has a considerable impact in Mexico’s economy. The states of Chihuahua, Durango, Guerrero and Zacatecas are in this moment Mexico’s largest zinc-producing states, and “Peñoles” is the enterprise with the most participation in the extraction of the mineral in the country.

Mexico is not only a producer, but is also a consumer of the metal. Approximately 150.000 metric tons are consumed each year in Mexico since 2010, and this amount has been increasing each year with a 3 percent growth average. The biggest use and demand of the mineral in Mexico is for galvanizing (process of covering steel in order to protect against corrosion), which is approximately 85% of the zinc market and is normally used in the construction sector. Then comes die casting and alloying (brass), occupying the second place. They are mainly used in the automobile sector and conform 5 percent of the zinc market. Then follow zinc chemicals (fertilizers, skin products, etcetera) and rolled zinc (pennies and others).

Between the years of 2010 and 2011, zinc production increased by 37.10% and the level of zinc mine output also increased by 10.85%, even though there was a decrease in refined zinc which reflected on the demand and on the price fluctuation compared to previous years. In 2012, zinc production in Mexico slightly decreased, while zinc mine output had actually increased 4.5%. As for the company (Peñoles), the same year, they decided to invest $203 million on its new project that consisted in a mine that would start functioning in 2013 in the state of Durango and would produce 70.000 tons of zinc per year. However, in 2013, statistics show that the production of zinc actually decreased this year as well as the level of zinc mine output (2.7% less). But Peñoles continued to be the company with the most influence in the metal’s production.

These past few years, the market has been affected by a supply shortage, due to the fact that mines are reaching the end of their productive lives. This is not only in Mexico, but all around the world. Approximately eighteen mines have closed, and as a result, the closure of mines has not only caused a deficit in supply, but has also made demand increase and has provoked a rise in the price. Since