Mexican mining projects worth US$4.5bn suspended due to reforms

Mexico’s mining chamber (Camimex) warned that mining projects that involve investments of US$4.5bn are suspended due to the uncertainty created by the mining reforms promoted by the current administration. 

Most of the obstacles for projects stem from the difficulties in obtaining environmental permits from authorities, the general director of the Camimex, Karen Flores, said during the forum "Mexico’s mining challenges", hosted by the association of mining engineers, metalworkers, and geologists (AIMMGM). 

“At present we've recorded more than 220 authorizations with environmental authorities that are halted, and they represent investments of US$4.5bn,” she said. “They also represent 50,000 jobs that are suspended because there's no knowledge of the technical aspect of the sector to unlock the permits.”

Metal and non-metal mining has been affected by a policy promoted by President Andrés Manuel López Obrador’s administration to freeze new concessions and slow down permitting processes. 

This has combined with the uncertainty created after the approval of mining reforms, which, among other changes, gave government geological service SGM exclusive exploration rights. The lack of regulations for four amended laws that apply to the sector has also halted various mining initiatives in states including Chihuahua, Zacatecas, Durango and Guerrero. 

“These are times of huge uncertainty. Without exploration, the future of Mexican mining would be jeopardized and the country’s mining sovereignty would be at risk,” said Flores. 

“Mining is sensitive to every ideological or revolutionary shift, and now this legal-ideological mix is not helping at all to attract investments. Jobs are being lost,” Raúl García Reimbert, president of the college of mining engineers, metalworkers and geologists (CIMMGM), said during the forum.  

A new presidential initiative for constitutional reform presented in January to prohibit open pit mining and prioritize domestic water consumption would also pose new obstacles for mining and have serious economic impacts if approved.

"A ban of this kind would be catastrophic at the national level, not just affecting 60% of production but more than 1.5mn jobs that depend on the sector," said Flores. 

Armando Ortega, president of the mining committee of the Canadian Chamber of Commerce in Mexico, said he believes that the mining sector is being attacked. 

“For more than five years the sector has been under siege, and part of this antimining discourse has driven a segment of public opinion to reject us,” he said at the forum. "Over the next few days we will reach a climax of polarization [due to the June 2 elections], but no matter who wins we have to rebuild, reconstruct and reset."