Data Insights: US$17bn in gold, silver and copper projects at risk if Mexico bans open-pit mining

At least US$16.7bn in investments in gold, silver and copper projects in advanced exploration and environmental and social assessment stages could be at risk if Mexico enacts the open-pit mining ban being debated in congress.

According to BNamericas' database, 10 open-pit gold, silver and copper projects in the environmental and social assessment stage alone, with estimated combined capex of US$11.8bn, may not see the light of day if the ban is implemented. Added to this are 13 other projects in advanced exploration, involving some US$4.89bn.

Projects in these stages could face the greatest difficulties in moving forward if the legal reform is approved, since they do not usually have all the necessary permits to begin construction and operations.

Of the projects in the evaluation stage, the most important is Grupo México's El Arco in Baja California, with capex of US$9bn, and where the company expects to start operations in 2030.

The project includes an open-pit mine combining a concentrator and a solvent extraction/electrowinning plant with estimated output of 190,000t/y copper and 105,000oz/y gold. Grupo México reported that it has completed the environmental impact study to present it to the authorities.

Since leftist Andrés Manuel López Obrador took office in 2018, no new concessions have been granted, which, combined with a slowdown in mainly environmental permit processing, continues to affect the performance of the Mexican mining industry. López Obrador's term ended on October 1, however, when he was succeeded by political ally Claudia Sheinbaum.

In mid-August, the constitutional committee of the lower house approved the proposal to ban open-pit mining, which was presented by López Obrador in February as part of a package of 20 constitutional and legal reforms that included the controversial transformation of the judiciary, which has been published in the official gazette.

Since the ruling coalition has a significant majority in both legislative chambers, the general expectation is that the proposal will be approved without major setbacks in the near future, despite industry concerns over its consequences. Open-pit mining represents almost 60% of the value of the country's mining and metallurgical production, according to data from mining chamber Camimex.

Open-pit mining is the predominant extraction method for metals such as copper and lithium, which tend to be distributed in relatively low concentrations over large areas. The ban would not be retroactive and so it would not apply to operating open-pit mines.

Environmental and social assessment	State	Capex (in millions of US$)
San Antonio (Heliostar)	Baja California	84.3
Cerro de Oro	Zacatecas	28.1
Cordero (Phase 1)	Chihuahua	606
Cordero Expansion (Phase 3)	Chihuahua	17
Cordero Expansion (Phase 2)	Chihuahua	291
Saint Nicolás	Zacatecas	1,100
El Arco	Baja California	9,008
Cerro del Gallo	Guanajuato	135
Tuligtic (Ixtaca)	Puebla	174
La Preciosa	Durango	327
Total		11,770

Advanced exploration	State	Capex (in millions US$)
San José de Gracía	Sinaloa	-
Los Ricos Norte	Jalisco, Nayarit	221
Tepal	Michoacán	214
Los Filos Expansion	Guerrero	1,067
Santa Gertrudis	Sonora	32
San Javier (Barksdale)	Sonora	116.8
La Joya	Durango	141
Chipriona	Sonora	-
Santo Tomás	Sinaloa	1,103.5
La Virginia	Sonora	-
Los Reyes (formerly Guadalupe de los Reyes)	Sinaloa	89.5
Pitarrilla	Durango	741
La Verde	Michoacán	1,160
Total		4,886