Mexico's miners see brighter future amid investment needs

After grappling with an adverse environment during President Andrés Manuel López Obrador's administration, whose six-year term ends on October 1, Mexico's mining industry is optimistic about the future with an incoming government that will need investments to fulfill social and infrastructure commitments and energy transition minerals.

This was one of the conclusions at the Mexico Mining Forum 2024 held in Mexico City, with senior executives from Fresnillo and Canadian companies Torex Gold and Alamos Gold.

“We're at a standstill due to the anti-mining policy, the lack of mining concessions, environmental permits and a tremendous lack of investment…. The mining sector can no longer have more depressing conditions than those we have currently and that's where we're at,” said Alamos Gold's Mexico VP, Luis Chávez.

“I see a very good possibility of a more productive mining sector in the coming years. How many years? I don’t know, but the common factor is that when conditions are so bad, they have to improve and the public and private sectors are aligned because the public sector requires investments for its social programs and large works and for years the private sector has had a portfolio ready to invest in new projects,” added Chávez.

President-elect Claudia Sheinbaum will be sworn in on October 1, after winning a landslide as the standard-bearer of ruling Morena party, so many policies of leftist López Obrador are expected to continue.

Although congress is currently debating a bill by López Obrador to ban open-pit mining, which would threaten an estimated 60% of the value of the country's mining and metallurgical production, there remains optimism in the sector.

Faysal Rodríguez, senior VP of Torex Gold in Mexico, said “the fundamental part is how, as an industry, we can connect with a leftist government that has been in power for six years and whose priority is obviously not the mining industry. In a country with 30 million poor people and serious public security problems, we have to find a way to insert ourselves into that leftist narrative.”

Torex's biggest local investment involves US$950mn in the Media Luna project in Guerrero state. Rodríguez said both chambers of congress will likely approve the bill in the coming weeks as submitted by the executive, which is why the task is to think of different ways to connect with the incoming Sheinbaum government.

Fernando Alanís, former president of Baluarte Minero and defender of the sector, agreed with Rodríguez that the main problem is more ideological, which has been complicated by the political issue, but he emphasized that “there is compelling data on the urgent need for metals.”

“We have a mining country, with a mining vocation, but that's offset by the policies we have. Ideology has won and there's distrust in the mining sector and great influence of anti-mining groups that have imposed their ideology on governments with false, undocumented information. The challenge is how to communicate better. We have to find a way to neutralize that ideology,” said Alanís.

Fresnillo CEO Octavio Alvídrez said that “to be a miner, you must first be optimistic” and recalled that Mexico has great geological potential that has prevailed for more than 450 years of mining history in the communities.

“We're on the same side as all the federal administrations,” said Alvídrez. He added that, on the one hand, economic growth is required, even more so in places where mining is the last alternative for development, and on the other, it is necessary to produce the critical minerals that are essential for both electromobility and the energy transition, as well as to maintain present and future living standards.

“It is in these similarities that we must support our dialogue. I also see an administration that listens, is open in some way, and our best letter of introduction is always the visits to our mines,” he added.