Beyond Headlines: The Reality of Sustainable Mining in Mexico

Mexico's mining sector is facing increasing scrutiny over its environmental and social practices, particularly as demand for minerals essential to the energy transition rises. In response, mining companies are implementing strategies to demonstrate their commitment to environmental, social, and governance (ESG) principles while minimizing their environmental footprint.

Though often viewed as overregulated,  ESG practices are integral throughout the mining industry's value chain, enabling companies to exceed local environmental regulations. Listing on stock exchanges like the Toronto Stock Exchange (TSX) and the Toronto Venture Exchange (TSXV) requires strict compliance with environmental standards. Companies adopting responsible mining practices and prioritizing ESG commitments enhance their reputation and position themselves favorably with investors, especially in a recovering market where low-risk profiles are highly sought after.

Marisol Barragán, Country Manager and General Director, New Gold and Minera San Xavier, emphasizes the company’s commitment to reducing its environmental and social footprint. “We produce minerals and energy, but we also contribute to the development and growth of our host communities,” she said. “This generates economic benefits for the country, as we are, and will continue to be, an essential industry.” Barragán highlighted the importance of producing more while impacting less, protecting both the environment and their people.

To achieve these goals, New Gold  has designed various strategies and established environmental indicators to monitor activities from the outset, beginning with characterization studies. These baseline studies help measure the impact of their activities. The company also invests significantly in technology to enhance processes and operator safety, focusing on restoring and remediating the sites where they operate. "Before concluding our activities, we conduct studies to ensure proper closure and restoration," Barragán added.

Cristina Rodríguez, President, Women in Mining Oaxaca, notes that mining companies are increasingly aligning with ESG objectives and setting clear goals. "In Mexico, key issues include water management, community relations, biodiversity, and climate change," she said. Rodríguez also highlighted the importance of transparency and accountability, emphasizing that mining companies comply not only with Mexican regulations—which are subject to change—but also with international standards.

Water management is a critical focus for mining companies in regions with high water stress. The industry utilizes approximately 0.35% of the concessioned water in Mexico, with treated wastewater accounting for over 60% of its water supply, according to Krystel Lima, Manager, CAMIMEX.

In addition to water management, mining firms are leveraging renewable energy sources to improve energy efficiency and decrease their carbon footprint. According to CAMIMEX’s Sustainability Report 2023, the mining sector’s energy mix comprises 62% fossil fuels and 38% renewables. In 2022, 42 mining operations produced and consumed clean energy equivalent to 4,636GWh, representing 38% of the total energy consumption for that year. Cogeneration systems, which simultaneously produce heat and electricity, contributed 40% to the total electrical energy generation, with 6% from fossil sources and 3% from renewables. Additionally, 76% of the operations that reported data are under self-supply contracts.

To reduce their carbon footprint, mining companies are investing in renewable energy generation, including wind farms and solar power plants. By accurately assessing energy needs, mining operations can secure adequate power generation and transmission capacity to support both operational requirements and environmental goals. For example, Torex Gold has invested over US$5 million in an 8.5 MW solar plant for its Media Luna project, incorporating electric trucks and equipment to enhance sustainability and safety.

As part of their emission control measures, companies are implementing suppression systems, road risk management, and upgrading equipment for more efficient energy use. This includes emission control technologies like dust collectors and gas scrubbers, as well as enforcing speed limits and confining dust-generating processing areas.

The sector is also recognizing the importance of engaging local communities in its ESG efforts. Orla Mining has partnered with local residents to develop social projects addressing community needs while promoting initiatives to protect local flora and fauna. In 2022, plant nurseries and greenhouses operated by companies affiliated with CAMIMEX produced 7.2 million trees, with 2.7 million planted by mining companies within their plots and surrounding areas, contributing to the reforestation of 2.53 ha. The remaining trees were donated to civil society organizations, government institutions, and universities, further supporting reforestation efforts across Mexico.

In this context, Faysal Rodriguez, Senior Vice President, Mexico at Torex Gold Resources, underscores the high-risk nature of the mining industry. "This industry is inherently different from others due to the hazardous materials we handle. Our teams are exposed to significant risks, but this demands more from us," he explains.

Regarding actual mining operations, CAMIMEX states that affiliated companies develop a closure plan from a mining project's inception, regularly updating it throughout the mine's life. This plan outlines criteria for a secure and viable closure that aligns with the customs and needs of local communities, ensuring necessary financial and human resources for different closure phases. The plan is adapted based on ongoing activities, such as creating nurseries for endemic species used in reforestation.

Additionally, programs are implemented to build the skills of nearby community members, supporting their long-term economic development. Cristina Rodríguez notes that a crucial step in closing an operations site is training community members to create their own entrepreneurial ventures and utilize the knowledge acquired from their mining experiences in other economic activities.

Faysal Rodriguez highlights the challenging regulatory environment, pointing out the lack of clarity and resulting uncertainty that affects sustainability efforts. "There can be no sustainability without a viable business," he states. Discussing sustainability in mining involves addressing each phase of the process, as each stage has a unique impact. Ultimately, Faysal Rodriguez affirms the industry's shared goal: generating a positive impact on communities while reducing environmental impact.

Despite existing ESG initiatives, industry experts emphasize the need for improved communication regarding the sector's contributions and responsible practices. A shift from a commodity-focused mindset to a more communicative approach is essential for effectively conveying the mining sector's value to communities and the broader economy.