Le Lézard
Classified in: Mining industry
Subject: SVY

CRU: Insight Into Competitiveness of Mexican Silver Mines


LONDON, October 10, 2017 /PRNewswire/ --

Following the multi-year devaluation of the peso, silver mines in Mexico have experienced marked cost deflation (in US$ terms) with costs now 9% lower than the rest of the World (RoW) on a CRU Business Cost basis.

     (Logo: http://mma.prnewswire.com/media/536199/CRU_Logo.jpg )

The biggest risk to this continued competitive position is peso appreciation. Under a low silver price (US$10/oz) scenario, we would expect to start seeing curtailments globally although surprisingly -Mexican cost competitiveness or expected supply would not vary much due to the polymetallic (and insulated) nature of the large silver mines.

Mexico: Downside risk has eased so peso appreciation now likely
Since November 2016, the peso has experienced high volatility due to concerns that US protectionist policies might damage Mexican export prospects. Renegotiations to improve NAFTA got underway in August and risk of extreme action on trade by the US has dissipated to some extent. The Banco de Mexico has raised rates this year to combat higher inflation resulting from a liberalisation of fuel prices early in the year, but with inflation set to fall into the target range of 2%-4% in 2018, we don't expect any further interest rate increases this year. At the end of August, the peso was trading around 17.80 to the dollar, up 14% since the end of 2016. This insight looks at the present cost position of Mexican silver mines along with how that position may change under a stronger peso and a lower silver price.

Read the full story: http://bit.ly/Mexican-silver-mines  

Read more about CRU: http://bit.ly/About_CRU

About CRU  

CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China. CRU employs over 250 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia - our office in Beijing opened in 2004.

When facing critical business decisions, you can rely on this first-hand knowledge to give you a complete view on a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.

CRU - big enough to deliver a high quality service, small enough to care about all of our customers.


SOURCE CRU


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