Mining reform undercuts Mexico's potential in energy transition – CanCham

The reform approved by Mexico's congress of the country’s mining legislation undermines the country’s potential in the framework of the global energy transition, according to the president of the mining task force of the Canadian Chamber of Commerce in Mexico (CanCham).

The new legislation, sent to the executive branch and awaiting publication in the official gazette, cuts the maximum length of mining concessions to 80 years from the previous 100 years and also grants the State exclusive powers to carry out mining exploration. 

"It's unfortunate that a country with the potential to become a world leader in strategic minerals has opted for economic dirigisme, especially at the wrong time and for the wrong reasons," Armando Ortega (pictured) told BNamericas.

"The mining reform undermines Mexico's ability to compete on the world stage and will have negative consequences for its long-term growth," he added.

The former president of CanCham said that, considering the bigger picture, Mexico is losing an extraordinary opportunity to become a supplier of strategic minerals for the global energy transition, which is an issue of paramount importance for its partners in the US-Mexico-Canada Agreement (USMCA).

In the section on competitiveness in the roadmap of the January North American Leaders' Summit, or Three Amigos Summit, the three countries said that they "understand that critical minerals are crucial for a sustainable future in the region."

Therefore, they agreed "on the importance of making the most of the potential of critical mineral and semiconductor supply chains by adapting government policies to increase investment, the mapping of critical mineral resources and capacity building."

Mexico is the world's leading producer of silver, is a big copper producer and also has large reserves of the strategic white metal lithium with which electric vehicle batteries are manufactured.

"This country has all the vocation, it has the availability of minerals, national players and foreign capital ready to launch these projects," underlined Ortega.

He also noted that Canadian Foreign Trade Minister Mary Ng and US Trade Representative Katherine Tai this week released a joint statement highlighting the importance of working with Mexico to strengthen competitiveness across North America.

Both officials discussed continuing to work together to address shared challenges regarding reforms in Mexico's energy and mining sectors and avoiding taking any measures that undermine mutual prosperity. 

"That is the problem" with the mining reform, concluded CanCham mining representative Ortega.

Tai and Ng also discussed the importance of upholding rules-based trade, supported through the implementation of USMCA and a strong multilateral trading system underpinned by the WTO.