Mexico's Mining Industry Will be Valued at $17.8 Billion by 2020

Despite concerns over US President Donald Trump’s calls to renegotiate the North American Free Trade Agreement, the Mexican economy is doing well. 
Q1 GDP data reveals that Mexico’s economy grew by 0.6 percent during the period. That’s better than analysts predicted and only slightly behind growth of 0.7 percent in the US. What’s more, Mexico’s primary sector gained 0.7 percent in Q1 and rose 6.5 percent year-on-year.
Overall, Mexico currently has Latin America’s second-largest economy, and at least some of its prosperity is due to the mining industry. According to a 2016 report, mining accounts for 5.5 percent of the country’s GDP.
Gold was the top metal mined in Mexico in 2016, followed by silver and copper, as well as zinc. The country is the world’s biggest producer of silver, largely due to major miner Fresnillo (LSE:FRES), and was the eighth-largest gold producer last year.

But will mining continue to thrive and contribute to Mexico’s GDP moving forward? Broadly speaking, market watchers believe the answer is “yes” — indeed, analysts at BMI Research predict that the Mexican mining industry will grow by 3.3 percent annually, reaching a value of $17.8 billion by 2020.
That growth will be due to price strength for the country’s major mined minerals. And there is definitely room for further growth as only 27 percent of the country’s national territory has been explored.
Even so, there will be challenges. For one thing, Peru is currently the most attractive Latin American country for mining investment, according to a survey from the Fraser Institute. Peru produces more and copper than Mexico, but less silver.
Released in February, the annual survey shows that out of 104 countries, Mexico ranked 50th in terms of investment attractiveness with a score of 67.06; that’s down from 72.69 in 2012. The fall was partially due to the fact that Mexico is now considered one of the 10 most dangerous countries for mining companies.
Notably, however, investment in the Mexican mining space seems to be on the rise. It increased for the first time in four years in 2016, clocking in at $4.7 billion last year. That’s a 1.5-percent increase from 2015. Investment is expected to climb again this year to $4.8 billion — certainly a promising prospect for the country. 
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.