AMLO Presents Initiative to Shorten Mining Concessions
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AMLO Presents Initiative to Shorten Mining Concessions

Photo by:   Presidencia de la República
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Karin Dilge By Karin Dilge | Journalist and Industry Analyst - Thu, 03/30/2023 - 12:07

President López Obrador presented an initiative to modify the Mining Law to reduce the duration of concessions in the sector from 50 to 15 years, with the possibility of extending them only once for an equal period.

The proposal says that "mining concessions will have a duration of 15 years, starting from the date of their registration in the Public Mining Registry. They may be extended once, for an equal term, when their holders have not incurred in any cancellation conditions." The initiative also proposes a concession allocation scheme in which they will only be granted through a public bidding process that ensure the best economic conditions.

The right of concession holders to access land expropriation will also be eliminated. Instead, the proposal suggests to manage this through an agreement between concession holders and landowners or right holders. "This modification will force mining companies to negotiate monetary compensation subject to the consent of the landowners, including ejidos, communities and agricultural nuclei, in general," the initiative mentions.

The proposal also suggests a consultation with indigenous communities before granting the concessions and it establishes an obligation for concession winners to present a social impact study to determine the potential effects that mining activities could have on people's lives.

CAMIMEX expressed concerns about the proposal, saying that the drastic modifications to the procedures for obtaining mining concessions, the fulfillment of obligations and the imposition of sanctions could lead to significant capital outflow and a decrease in mining activity, which currently employs over 406,000 people and generates more than 2.5 million indirect jobs.

The changes could also have a severe impact on the way the industry operates and radically alter the provisions on which national and foreign mining companies have invested in Mexico. This uncertainty could lead to a contraction of investments, which average over US$4 billion, annually.

CAMIMEX emphasized the need to review and comment on the proposed changes to ensure that the regulations acknowledge the reality of the industry and generate benefits for everyone.

Photo by:   Presidencia de la República

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