Press "Enter" to skip to content

Grupo Mexico announces $3.1 billion USD expansion investment

Mexico City, Mexico — Mining giant Grupo Mexico has announced a $2.3 billion USD expansion to their existing smelter capacity in Sonora along with a $815 million USD investment for new power lines in Baja California.

In total, the company plans to invest $3.1 billion USD for the refining of metals in Sonora and electrical infrastructure for a key mine in the Baja California peninsula, said Xavier García de Quevedo, executive vice president of the company.

García de Quevedo explained that the company will also allocate almost $9 billion USD in investments until 2027, including the $2.8 billion previously announced for its El Arco copper mine, which would anchor the energy sector in Baja California.

The rest will be distributed in additional infrastructure, two other mines and new zinc refining capacity.

García de Quevedo downplayed suggestions that political risk could derail investment plans by the world’s fifth-largest copper producer. While the administration of President Andrés Manuel López Obrador has shown mixed support for mining, Grupo México’s executive vice president said the plans of the mining, rail and energy company have been discussed with senior government officials.

“This is something that the government is already well aware of,” he said in an interview with Reuters, noting that the projects require permits but not new mining concessions. “We are all confident that we could have authorization soon.”

The energy plans in Baja California would benefit El Arco as well as domestic and commercial energy users in a region that includes the tourist center of Los Cabos, he added.

“The great potential that Baja California has cannot be developed if it is not with electricity,” he said, stating that electricity rates there are around three times higher than the national average.

The proposed power infrastructure includes a 500-kilometer-long transmission line that will run north-south along the southern half of the peninsula. García de Quevedo declined to specify from where the power would originate.

López Obrador considered mining an essential sector last year amid restrictions related to the COVID-19 pandemic and has been widely criticized by the industry for its slowness in granting permits and approvals, which has been attributed to cuts in the Ministry of the Environment, as well as a policy of no new concessions.

Grupo Mexico won a contract together with Spain’s Acciona to build a section of the Mayan Train, one of President López Obrador’s priorities.