Economics

What Are The Major Natural Resources Of Mexico?

Mexico is highly rich in natural resources.

Officially known as the United Mexican States, Mexico is a federal state located in the southern region of North America. The nation has an area of about 770,000 square miles, which make it the thirteenth largest country in the world. In term of population size, Mexico ranks 11th in the world with a population of more than 120 million people. The federation consists of 31 states as well as Mexico City, which also doubles as the capital city. Economically, the nation has a significant nominal gross domestic product (GDP) of about $1.199 trillion, which makes the country the 15th strongest global economy. Projections into 2050 approximate that the country has the potential of being the fifth largest economy in the world. This strong economy has a lot of contributing sectors including significant quantities of natural resources in the country. The main natural resources in Mexico are minerals, which include gold, copper, petroleum, silver, and others. Other resources include timber from extensive forests and agricultural land.

Mining

Metals

Mexico has an extensive history of mining that goes as far back as 500 years. The country is among the leading producers of certain minerals in the world. For example, in 2010, the country was the leading producer of silver in the world after producing about 4,411 tons. In that year, that massive production accounted for about 17.5% of the global silver production. Gold is also a major mineral that accounts for a huge portion of the mineral sector and the GDP as a whole. In 2010, the country’s gold mines managed to produce about 160046.78 pounds of gold. Within the mineral sector alone, gold managed to account for at least a quarter of the sector’s total revenue. In addition, the gold production in 2010 represented a 41% increase from the previous year.

In the case of other minerals, such as iron ore, the nation does not have substantial reserves for export but there is enough for local use. In 2010, the country’s iron mines were able to produce 14 million metric tons of iron. Related minerals such as pig iron and crude steel also had increased productions in the same year by about 16.7% and 19.7% respectively.

Copper and zinc are also natural resources found in Mexico. On average, one of the major copper mining projects, the El Arco project of Grupo México, can produce about 190,000 metric tons of copper every year. The group also has plans of expanding into the production of gold and molybdenum. Like most of the other minerals, copper production from Mexico in 2010 increased by around 12% compared to the previous year’s production. Similarly, zinc production increased by 3% in 2010 compared to 2009’s production. In 2018, the demand for copper and zinc is expected to increase, which will be a major boost to the economy of Mexico.

Aside from these valuable minerals, Mexico is also one of the leading global producers of coal. Coal mining in Mexico dates as far back as 1884 when Americans began developing the mines. Production did not reach its peak until investors came in the 20th century and pumped in resources into the sector. After the investments, the nation saw coal production peak in 1925 after it produced about 1.45 million tons. In terms of size, the proven coal reserves in Mexico, which are about 1.3 billion tons, are ranked 13th in the world.

Generally, Mexico is among the top ten global mineral producers. Currently, Mexico produces about 1.7% of the global mineral demand. In 2010 alone, the mining sector managed to generate a revenue of around $730 million. The level of investment is also substantial. For example, investment in 2017 stood at about $5.5 billion with projections stating that the value will increase in the coming years.

Petroleum

The massive petroleum sector means that the country is the 11th largest global producer of oil. In terms of the quantity of oil reserves, Mexico has the world’s 17th largest reserves. In the Western Hemisphere, only three countries produce more oil than Mexico. These three countries are the US, Venezuela, and Canada. Despite a decline in the oil production in recent years, the oil sector still contributes around 10% of the country’s revenue from exports.

Presently, the country produces three types of crude oil namely heavy Maya-22, light low-sulfur Isthmus-34, and extra-light Olmeca-39. Of these three grades, the first one accounts for more than half of the country’s oil production while the last two account for about 28% and 20% respectively of the total production. As of 2002, the oil reserves in Mexico stood at a whopping 30.8 billion barrels. However, estimates by leading firms place the reserves at a lower 12.4 billion barrels in 2007.

The country’s leading oil firm is known as Pemex and has been the leading firm for several decades. The mammoth tax that this firm pas to the Mexican government accounts for one-third of the government’s total tax revenue. The largest oil field is the Cantarell Field, which is about 50 miles from the shore of the Bay of Campeche. However, the oil reserves and production from the filed have been waning since 2004.

Agriculture

Despite accounting for a smaller portion of the GDP, agriculture has been a crucial sector in the past. In fact, the country is considered one of the cradles of agriculture. In modern times, most of the agricultural products include things like beef, vegetables, milk, corn, poultry, and many others. However, more profit goes to farmers growing cash crops such as sugarcane and coffee. Coffee is one of the major export products from Mexico. A huge portion of these products, around 60%, goes to the US. Other crops include bananas, mangos, vanilla, rice, and cacao.

Forest cover in Mexico spans an area of around 64 million hectares, which translates to about 34.5% of the total area of Mexico. There are several categories of forests namely tropical, temperate, cloud, riparian, and other types. These forests serve several purposes including the provision of habits for animals, providing timber, as well as climate control. In 2011, forestry contributed about $7.0 billion, which was about 0.6% of the country’s GDP.

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