'Miners live in hope of better days' amidst turmoil of Mexico reforms

The new president of the Mexican association of mining engineers, metallurgists and geologists (AIMMGM), Rubén Del Pozo, believes there is still time to prevent congress from fully approving a ban on open pit mining proposed by President Andrés Manuel López Obrador as part of a controversial package of constitutional reforms submitted in February.

The initiative was recently approved by the constitutional committee of the lower house, setting off alarm bells in the sector, which continues to lobby hard to prevent promulgation in September, when the new legislative period begins with a big government majority.

During his term as president of the association, Del Pozo hopes to continue working to change public misconceptions about mining, demonstrate its importance to the economy and publicize the true scope of the social and economic contributions of the industry to society.

In this interview with BNamericas, the AIMMGM president talks about the proposal and the mining reform passed in May last year, as well as the idea of carrying out a new legislative reform for the sector with the participation of those who truly know and understand the industry.

BNamericas: What are the main challenges you foresee for the Mexican mining industry during your tenure as AIMMGM president?

Del Pozo: The mining industry isn't fully understood or appreciated. There’s a misconception about what mining is, and we need to address this at all levels. The true value of mining, the real contributions of the mining industry, has to be recognized.

There’s a great lack of knowledge about mining. People think mining is all about wealth, gold, silver, like in fairy tales. But the truth is that it’s not like that, obviously. There are many minerals that are industrial, serving as the foundation for industrial development, and beyond their economic value, they play a key role in industrial growth.

I’ve often commented, especially now with discussions about banning open pit mining, that people may not even realize what they’re prohibiting. For example, cement, lime and other materials are extracted via open pit mining. If it’s banned, can you imagine the impact on construction?

Lots of minerals are essential for the energy transition, like lithium, which is extracted through this mining method. If banned, those lithium reserves would remain buried and untapped.

This stems from what I mentioned earlier: a lack of real understanding of what mining entails. Mining brings many benefits related to industrial development, the development of towns and communities where mining operations are located. Mining generates jobs, promotes wellbeing, and brings infrastructure like roads, hospitals and schools. Banning it would have serious consequences.

BNamericas: What would be the ideal outcome for the sector regarding the 2023 mining reform, for which regulation has still not been issued and which is facing two pending actions of unconstitutionality in the supreme court?

Del Pozo: The additions and reforms made to the mining law are nonsensical. On one hand, they seem to support mining, but in reality, they don't. That’s why I insist that a thorough review is necessary.

What these reforms are creating is uncertainty, driving away investment and employment in the mining sector. Let’s look specifically at investment in exploration. Without incentives for exploration, like in other countries, investments will go elsewhere. This will deprive us of the opportunity to develop new projects.

The existing projects and mines will eventually deplete – that’s certain since mining is finite. This is why we need to continually promote the creation of new mines. But without exploration incentives, we’re not fostering the development of new mines.

BNamericas: So, should there be a new reform of mining legislation?

Del Pozo: Yes, but this time consulting the professionals, those who truly know the mining industry.

BNamericas: Is the pipeline of mining projects running dry due to the lack of new concessions? What actions should be taken to reactivate it?

Del Pozo: We don’t have the authority to declare new concessions. Our responsibility is to run an intense information campaign to raise awareness about the serious consequences if we continue down this path of not granting concessions. That’s our commitment, to disseminate and provide technical foundations for the risks involved with continuing these actions, because we’re all professionals. In the mining sector, some of us come from academia, but we’re all connected.

We see it all. Of course, we focus on the technical aspects, but we also consider the social and labor impacts because all of this affects us.

BNamericas: Are there any meetings planned with the government, and what actions is the sector and the association taking to prevent the ban on open pit mining?

Del Pozo: We’re all in this together, engaging with our representatives, lobbying intensely. How can I explain it? These aren’t scheduled actions that we’re announcing publicly. There’s just a lot going on everywhere. I meet with legislators in the mornings and afternoons, explaining the consequences of the ban.

BNamericas: How is the granting of environmental permits progressing, and what issues have arisen regarding water concessions following the 2023 reform?

Del Pozo: It’s all stalled. The only thing in our favor is that there’s no retroactivity, so the mines currently operating haven’t had to stop, as they’re working under the previous rules. However, for new projects, things are at a standstill, and no permits have been granted yet, as we’re waiting for the regulations.

BNamericas: Do you still expect greater flexibility for the mining sector under the new government of Claudia Sheinbaum, despite the approval by a congressional committee of the proposal to ban open pit mining, which isn't one of Sheinbaum's stated priorities?

Del Pozo: We remain hopeful and trust that the new government will bring better conditions for mining.

The reality is that the new government hasn’t yet taken office. What we’re dealing with are the last actions of the outgoing government.

Open pit mining accounts for 60% of total mining production by value. We’re talking about around one million jobs. Banning open pit mining would lead to a massive loss of public revenue and foreign currency generation. Back in 2011, we ranked 11th as an attractive destination for mining investment, according to the Fraser Institute. Today, we’re ranked 74th. We’ve dropped 63 places, and with this ban, we’ll likely fall even further.

BNamericas: So do you think there’s still time for the new president to reconsider, even if the open pit mining ban is approved by both chambers of congress in September?

Del Pozo: I believe so. The decision isn’t final yet. It was approved by the constitutional affairs committee of the lower chamber but it still needs to be approved by the full chamber of deputies and the senate. There are still two steps to go.

That gives us time and opportunities to push for change, to convince lawmakers, and to take action. We can't declare the ban a done deal just yet.

There’s a saying that fits us well: miners always live in hope of better days. And yes, we always trust that things will improve.

This interview was originally published on August 22.