Mexico Sees $30.5 Billion in Project Kickoffs for Second Half of 2015, with Transportation in Driver's Seat

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Researched by Industrial Info Resources (Sugar Land, Texas)--Transportation projects make up nearly half of Mexico's $30.49 billion in projects that are set to begin construction in the second half of the year, according to Industrial Info's project database. More than 90% of that total is attributed to just four industries: Industrial Manufacturing, Power, Metals & Minerals, and Oil & Gas Pipelines.

Click on the image at right for a graph detailing construction kickoffs in Mexico in the second half of 2015, by industry.

The Industrial Manufacturing Industry is far ahead of all other industries in Mexico for the total investment value (TIV) of project kickoffs in the second half of the year, with $16.78 billion in expected construction starts. Almost three-quarters of that amount is attached to transportation systems, two of which are subway line upgrades: $650 million in equipment additions at Mexico City's Line 1, and the $628 million expansion of Line A in La Paz, Mexico State. The Mexico City project involves replacing 45 trains (each with nine cars) on an 18.8-kilometer stretch, while the La Paz project involves building 13 kilometers of rail with six stations. The projects are expected to be completed in first-quarter 2016 and first-quarter 2017, respectively.

The Power Industry holds a distant second place with $5.34 billion in Mexican projects set to begin construction in the second half of the year, including Comision Federal de Electricidad's (CFE) $477 million construction of a natural gas-fired, combined-cycle power station near Empalme, Sonora. CFE plans to construct two SGT6-8000H-class combustion turbine generator sets from Siemens AG (NYSE:SI) (Munich, Germany), with heat-recovery steam generators driving a steam-turbine generator. SENERMEX Ingenieria y Sistemas S.A. (Mexico City) is performing engineering and construction services. The project is set to be completed by the end of 2017.

The Metals & Minerals Industry takes the bronze with $3.74 billion in expected kickoffs, the bulk of which is attributed to two large projects from Chesapeake Gold Corporation (Vancouver, British Columbia): the $1.37 billion, first-phase construction of a gold and silver mine and concentrator near Soyupa, Durango, and the $1.13 billion, first-phase construction of a gold, silver and zinc processing plant near Cosala, Sinaloa. The Durango project involves building a 29.5 million-ton-per-year open pit mine and 60,000-ton-per-day concentrator to produce an average of 659,000 ounces per year of gold, 15.9 million ounces per year of silver, and 2,230 ounces per year of zinc over a 25-year mine life. It is set to be completed in the second quarter of 2017.

The Sinaloa project involves constructing a pressure oxidation plant, cyanidation plant, Merrill-Crowe recovery plant and zinc recovery plant to process sulfide concentrate and produce 659,000 ounces per year of gold, 15.9 million ounces per year of silver and 2,230 ounces per year of zinc. It is slated to wrap up toward the end of 2016.

The Oil & Gas Pipelines Industry has about $2.19 billion in projected kickoffs in Mexico through December, including the Secretaria de Energia's (Mexico City) $580 million construction of a natural gas pipeline that will run from Salina Cruz, Oaxaca, to Ciudad Hidalgo, Chiapas. Mexico's Department of Energy is planning the 420-kilometer, 36-inch-diameter project as part of the broader Mexico-to-Guatemala Natural Gas Pipeline. State-owned Pemex Gas y Petroquimica Basica (Mexico City) is performing planning, scheduling and other services. It is set to be completed by the end of 2016.

More than 75% of Mexico's TIV--about $23.1 billion--is related to 213 projects that are now in the engineering stages. The country also has 88 projects worth about $6.8 billion in the planning stages, where plenty of factors could increase, decrease or eliminate the expected spending, while 272 projects worth $580 million already have kicked off the first stage of construction and will kick off the next in the second half of the year.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.