The total market in 2011 for coal mining equipment in Mexico was USD 259.4 million and is expected to increase to USD 268.4 million by the end of 2012. Market growth is expected to continue into 2014. Mexico’s major coal mining deposits are operated by the companies MICARE, MIMOSA, San Patricio, and Pasta de Conchos located in the State of Coahuila, which are the primary end-users of coal equipment and services. These four companies represent 80 percent of market demand of the equipment; the remaining 20 percent comes from 32 small coal mining companies.
At the end of 2011, Mexico ranked number 24 in the world in terms of production of coal with the main mining deposits in the States of Coahuila, Sonora and Oaxaca. Mexico’s coal production in 2011 reached 15 million tons and all production is used by the Federal Electricity Commission (CFE -Mexico’s Electric Power Utility Government-owned company) to generate electricity and as a fuel for the steel mills in the country. Other minor coal deposits and companies exist in the States of Colima, Chihuahua, Chiapas, Durango, Guerrero, Hidalgo, Jalisco, Nuevo Leon, Michoacan, Puebla, San Luis Potosi, Tabasco, and Veracruz.
During the first two months of 2012, international and local mining companies with various mining projects, including coal mining, were awarded contracts for various projects in Mexico- valued at over USD 2.2 billion for open pit and underground mining. Mexico is not self-sufficient in coal and imports over 10 million tons of coal a year from China, Australia, Colombia, and Brazil.
Domestic and international mining companies operating in Mexico must acquire a concession issued by the Mexican Secretary of the Economy. By the end of 2011, there were over 24,900 mining concessions granted to small, medium, and large mining companies in Mexico. According to the Secretary of Economy new concessions for coal production projects were 200.
Companies that have received concessions are required to submit an application to the Secretariat of the Economy (Secretaria de Economia) that includes an investment plan, the area or region to be covered, the type of exploration, and details about open pit and/or underground mining projects. According to Mexican investment law, foreign companies may own one hundred percent of the investment/operations.
Domestic and international mining companies operating in Mexico must comply with environmental legislation, including the Law of the Ecological Balance and Environmental Protection and its Regulations, the General Law for the Prevention and Integrated Management of Waste Materials and Regulations, and the National Water Law and Regulations. Also, mining companies operating in Mexico must abide by strict safety controls based on international standards.
The market for coal exploration and production equipment is expected to grow at an average of 3.5 percent during 2012 as a result of investments already committed and concessions obtained by the four major coal mining companies.
The figures in Table 2 demonstrate that the total market will increase from USD 259.4 million in 2011 to USD 268.4 million by the end of 2012. According to members of the Mexican Mining Chamber (CAMIMEX), 40 percent of the demand for coal mining equipment will be met by mining equipment manufacturers with distributors already in Mexico and 60 percent of demand will be filled primarily by purchases from manufacturers in the U.S., China, Japan, and Germany.
The following is a projection of the coal mining equipment that will be in greatest demand during the next five years.
Cylindrical roller bearings, spherical roller bearings, blowers, compressors, conveyor belts, cranes, crushers, dozers, engines, fans, forklifts, road tractors, front-end shovel loaders, bulldozers and angledozers, dumpers, self-propelled rock bearing machines, pumps, shaft muckers, slushers, sorting belts, lamp chargers, goggles and safety glasses, belt and body harnesses, hand held acoustic level meters, breading apparatus, gas analyzers and sensors, fire alarm and detectors, personal gas detection and metering equipment, communications equipment, illumination equipment, explosives, and air ventilation and metering devices, etc.