Legislators, entrepreneurs urge AMLO to stop bashing mining

Mexican entrepreneurs and legislators urged President Andrés Manuel López Obrador (AMLO) to stop hitting the local mining sector.

In a press conference on Tuesday, Armando Guadiana, president of the senate energy commission and a legislator of the president's Morena party, reportedly said that AMLO must be poorly informed, as canceling the granting of concessions would damage investments and therefore mining jobs.

Guadiana's remarks follow AMLO's speech earlier this week affirming that during the country's neoliberal period, some 40% of Mexico's exploitable territory was concessioned without generating benefits in equal measure. According to the President, the state will not authorize any more concessions.

"That earlier concessions will be maintained, we will not cancel them. But we will no longer continue to grant new concessions for mining," AMLO said, according to the official news service.

INVESTMENTS

The head of Mexico's industrial chamber Concamin, Francisco Cervantes, called AMLO's announcement not viable, local newspaper Milenio reported.

"Mining has been badly demonized, but socially it is one of the sectors which contributes most," Cervantes said, adding that contributions of the mining sector in Mexico are equivalent to the budget of Jalisco state.

Indeed, Camimex said in July that it sees investments in the local mining sector hitting US$5.34bn this year, up 9.1% from 2018.

The investment figure compares to a previous forecast of US$2.60bn announced in mid-May. At the time, the chamber said the drop would be driven by uncertainty over government policy.

In addition, according to Camimex, Mexico's extractive industry was the largest taxpayer last year, raising some 46.2bn pesos (US$2.41bn), up 30% year-on-year.

MINING PORTFOLIO

Mexico's project portfolio is expanding. More than 20 new mines, expansions and optimizations with combined capex north of US$7bn are expected to begin production by 2025. 

These have the potential to lift annual production by 1Moz of gold, 36Moz of silver and more than 300,000t of copper, plus significant zinc, lead and lithium.

Furthermore, mining in Mexico makes up for 2.5% of total GDP and employs some 371,000 people.