MINING

To encourage mine operations, the Carranza administration allowed mining machinery to enter Mexico duty-free. The mining sector quickly recovered from the Revolution, spurred by the First World War-induced commodities boom and substantial investment in mines, smelters, and chemical refining plants. In 1920, Mexico’s 100,000 miners produced 9 percent of Mexico’s gross domestic product and 60 percent of its exports.25

Mining remained vibrant during the 1920s, aided by new refining technology, peaceful conditions in Mexico, improved rail service, and a booming U. S. economy, which increased the demand for silver, lead, zinc, and copper. Through the 1920s, investment in new mining equipment continued at record rates. As was the case before the Revolution, foreign investment in mines was welcomed, since Mexico needed foreign capital, technology, and access to export markets. By the end of the decade, Mexico was producing more copper, silver, and lead—its three main mineral exports— than it had before 1911.26

The mining industry was 95 percent foreign controlled. During the Revolution, many smaller firms either were forced to sell out or went out of business, leaving the industry increasingly dominated by a few large American firms. Between 1919 and 1929, U. S. mine investment increased from $222 million to $248 million. The American Smelting and Refining Company expanded its Chihuahua smelter, making it the largest lead smelter in the world. Mining, which in 1930 accounted for 6 percent of Mexico’s gross domestic product, remained an enclave industry. Its main link to the rest of the economy was through taxes.

During the late 1920s, many Mexican mines were facing depletion. As a combined result of depletion and reduced foreign demand during the Depression, the value of mine production fell by 50 percent. By 1932, half of Mexico’s 90,000 miners were unemployed. As government control over mining increased, foreign capital was withdrawn.27

During the Cardenas administration, mining began to recover and the life of miners improved dramatically. With administrative and judicial support, miners’ strikes in 1934 and 1935 resulted in a 40 percent wage increase. Cardenas also required mine operators to hire Mexican professionals to fill the mine jobs U. S. professionals had performed. As a result of ore depletion, potential investors’ fear of Mexican nationalism, and the increased importance of other sectors, mining would never again play the key role it had in the past. By 1940, its contribution to Mexico’s gross domestic product had declined to 3.7 percent.28