Mexico miners angered as key govt post axed

A decision by Mexico’s government to scrap a key mining post has drawn criticism from the industry.

The economy ministry announced it is scrapping the role of mining undersecretary, held by Francisco Quiroga Fernández, from Tuesday as part of a broader austerity drive.

The decision comes at an acutely challenging moment for Mexico’s mining companies, which are grappling with COVID-19 health protocols and continuing high numbers of infections and deaths from the virus, and uncertainty over the policy aims of President Andrés Manuel López Obrador (AMLO).

Quiroga has won broad praise from the industry, including for his backing for a successful campaign to secure essential status for mining, which allowed activities to restart around the beginning of June following a two-month COVID-19 suspension.

His work also involved coordinating the implementation of COVID-19 health protocols in the sector, establishing a new registry to speed up the concessions process and supporting the formation of a working group to address growing security concerns.

SECTOR RESPONSE

A statement signed by all major Mexican mining groups, including industry chamber Camimex, condemned the decision to scrap the undersecretary post.

“As a mining country, Mexico cannot and should not lose such an important position in the federal executive, which guarantees its governance, ensures adequate administration of the nation’s natural resources and serves as an important bridge of communication between the different government entities that interact with our sector,” the groups said on Twitter.

The statement also praised Quiroga’s responsibility, efficiency and commitment, along with his deep understanding of the sector, while singling out his “primordial” role in the implementation of health protocols in the sector.

“It’s a real loss for the mining industry,” one industry insider told BNamericas, who spoke on condition of anonymity – but said the move was not unexpected.

KEY ROLE

Quiroga has been increasingly active in recent months, appearing in conferences and interviews praising the mining industry’s safe resumption of operations under the new health protocols.

The undersecretary also underlined the industry’s important social role in local communities and its economic clout, highlighting mining as a key supplier of jobs, export cash and minerals used in other industries.

Quiroga also spearheaded a drive to overhaul the concessions applications process through a digital registry, combining information from a number of different databases.

The overhaul was aimed at smoothing the process and tackling a backlog in applications, which have been substantially reduced from the 21,000 when AMLO came to office.

The outgoing official has also highlighted work to address insecurity through the formation of a working group, comprising the economy ministry, security forces and state governors.

Security is a key challenge for mining companies in Mexico, with powerful criminal cartels vying for control of swathes of the country, including in mining states such as Sinaloa, Chihuahua and Guerrero.

MINISTRY RELEASE

The decision to scrap the role of mining undersecretary followed a presidential decree in April, which set out austerity measures across government departments.

The economy ministry, which oversaw the post, said the move will not impact its duties relating to the mining sector.

“The cancelation of the role of the mining undersecretary does not imply any impact on the attributes, faculties and work the economy ministry carries out in terms of mining, through the mining department, development fund for mining production zones and the mining development department,” the ministry said in a release.

Quiroga will continue to collaborate with the Morena party administration in a new role, it said, without giving further details.

ANALYSIS

During his time in the role, Quiroga helped smooth out AMLO’s hard edges.

While the president has been critical of a sector he has accused of leaving a trail of environmental destruction and precious little benefit for local communities, Quiroga has hailed mining’s ability to deliver social improvements, including jobs in isolated areas.

Quiroga also pledged to work to improve the country’s standing as a mining jurisdiction in international rankings, while asking miners to ensure they meet key requirements on the environmental, social and fiscal fronts.

While it remains unclear whether scrapping the mining undersecretary post will have any impact on the economy ministry’s work in the sector, Mexico’s miners may be justifiably disappointed by the move.

Mining has long appeared a non-priority for AMLO, who came to office in December 2018 and whose main focus ahead of the COVID-19 pandemic was social policy and a turnaround at state oil producer Pemex.

Latin America’s other key mining countries – Chile, Peru and Brazil – have dedicated mining or mining and energy ministries, while Mexico now lacks a mining undersecretary within its economy ministry.