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News Article

Electricity Reform Puts Sector’s Sustainable Progress at Risk

By Paloma Duran | Tue, 10/26/2021 - 04:30

The recent electricity reform proposed by President López Obrador is an obstacle for the mining sector to move towards greater sustainability, CAMIMEX said. The Chamber explained that if approved, mining companies would have to buy energy from the CFE, which is neither clean nor efficient.

Karen Flores, Director of CAMIMEX, explained that the cancellation of permits proposed in the reform would prevent the sector from having access to clean energy sources. Currently, the sector obtains 34 percent of its energy from clean sources. Following the reform, there is a risk of not only slowing the progress of the sector but of having a setback in this matter.

In CAMIMEX’s annual report, it is explained that the reform contravenes international agreements, above all the Paris Agreement, since it puts at risk the fulfillment of environmental objectives by hindering the generation of renewable energy and forcing all sectors to acquire CFE's energy, which is generated from fossil power plants. “This reform forces all productive sectors of Mexico to acquire energy from CFE, no matter how dirty, expensive and inefficient it is. Furthermore, the reform would reduce Mexico's competitiveness in the international market, ”said Flores.

The chamber warned that since CFE has a monopoly in the market, electricity prices will rise, which can make many mining projects economically unviable. “The government needs to provide greater legal certainty regarding the electricity reform initiative, because even without its approval, investment and projects are being lost. Likewise, the electricity reform is putting existing mining companies at risk, which generate well-being for more than 690 communities in the country and more than 2.3 million people on which families depend," said Flores.

Carlos Salazar, President of the Business Coordinating Council (CCE), recently said that the private sector is at high-risk with the reform. “If the reform is approved, we do not know how the electricity will be delivered to the private side and if it would be feasible for them with the costs that the CFE wants to establish. If not, it would affect up to 55 percent of energy deliveries each day."

The mining sector, represented mainly by CAMIMEX, has joined other companies and sectors open a dialogue with Congress, in which the opinion of all interested parties and an in-depth analysis of the impact of the electricity reform on the development of the country can be considered.

 

 

The data used in this article was sourced from:  
CAMIMEX, MIlenio, Forbes, La Razón
Paloma Duran Paloma Duran Journalist and Industry Analyst