The rise in energy prices – caused by the recovery in oil prices – as well as logistics and input costs have caused inflation in the mining sector in Mexico in recent years, the Mexican Mining Chamber (Camimex) said.
Last year, according to the National Producer Price Index (INPP), inflation in the mining sector, including oil, was 35.17%, the highest for a year-end since 2016, when prices at producers in that sector rose by 53.30 percent.
Camimex stressed that the data includes oil mining, but if this item is discounted, inflation for the mining sector in 2021 was 16.69 percent.
“That is, it is relatively lower than the total for the sector, but still above the national average, which was 10.26%, reflecting the inflationary pressure to which mining was exposed during the year,” Camimex told El Economista .
According to the explanation of the National Institute of Statistics (Inegi), the oil mining industry is classified into three categories: the first of which is the extraction of oil and gas, which generated an inflation for the producer of 58.22% per annum. . the closure of 2021.
Another item is the mining of metal and non-metal minerals (excluding oil and gas), which offered a rate of 13.46% per annum, while the third item, mining-related services, a rate of 7.49 percent.
Stopped projects
The pressure for the mining industry, last year, was the rise in energy prices, the rise in logistics costs and the cost of some supplies.
In addition, Camimex pointed out that in 2021 the industry was also facing expensive loans.
“The uncertainty in the markets means that some projects can be stopped or postponed, in the hope that there will be better economic conditions,” he said.
For example, of 1,190 foreign capital mining projects that Camimex reported in Mexico in 2020, 754 were postponed because the companies did not find the conditions to carry them out.
They see no changes this year
For this 2022, the third year in which the world has to live with the Covid-19 pandemic, mining companies expect inflationary pressures to continue.
“The effects of the pandemic are continuing and until it is controlled, inflation is likely to continue as in 2021,” Camimex said.
High inflation for producers is in turn a risk for inflation for consumers. Alejandro Saldaña, deputy director of economic analysis at Ve por Más (Bx +), indicated at the time that there was a risk that these increases would be passed on to the consumer, so that inflation – already at levels above 7.00% – could increase.
“In a realistic scenario, investment in the sector has declined, in 2021 we see for the time being that the figure projected at the beginning of the year has not been reached, which closed at 15%; in the mining sector, however, we will continue to work hand in hand with the authorities and the more than 690 mining communities to develop a socially and environmentally responsible activity that boosts the country’s economy, ”Camimex said.
Reference-www.eleconomista.com.mx