Envisioning a Better Mining Framework

Q: What is your perspective on the development of the governmental mining structure in recent years, and why would you like to see Mexico’s mining industry be given a more prominent role within government?

A: The adoption of neoliberalism with the introduction of the Mining Law of 1992 meant many changes for the mining industry. It seemed as if those changes were going to be very positive for the mining industry, and they were positive from a regulatory perspective, but not from a political or social one. From a political perspective the mining industry lost support and importance within the government.

Given its importance for the Mexican economy the mining industry needs to become more prominent, even at a federal level. I believe the industry has been enjoying its best moment in decades, but this is not reflected within the political context; sometimes companies have to put a lot of work into gaining support from federal and local authorities when facing problems regarding water, land access and local political issues, among other things.

Nowadays, the General Coordination of Mining still reports to the Ministry of Economy, but not directly; it falls under the responsibility of the Undersecretary of Industry. The problem with that structure is that the mining industry needs to be treated separately, not because it needs preferential treatment, but because it is different from other industries. Firstly it involves working with national wealth as the basis of the production chain; and secondly the areas for carrying out mining activities cannot be chosen randomly - production must be done in the place where the minerals are located. Mining concession holders have the right to ask for expropriations or temporary occupations of the land in question, which does not occur in other industries. For these basic and practical reasons the mining industry is totally different from any other industry and needs to be treated as such.

My main proposal would be to create a Federal Mining Commission, as well as designing a better strategy to inform the general public and the media about the role of the mining industry, and improve the bad reputation it has acquired.

Q: If a Federal Commission for Mining were to be created, what should be its organizational structure, execution capability, and decision making power?

A: One difference would be that the Mexican Geological Survey (SGM) and the financial branch of the mining industry could be incorporated into the same commission. When I was the Director General of Mines for one and a half years, the budget for our office was handled somewhere else and nothing was deposited into our account. Financial decisions were made elsewhere and based on other departments’ needs.

Another organizational issue has to do with the Ministry of Economy’s State Delegations. In the past, with the former organizational model, the General Directorate for Mining had a Delegate in every mining state, who reported directly to the Director General of Mines. Applications for new concessions had to go through a Mining Agent, and then through another Delegate, and finally through the Director General of Mines. Nowadays Delegates are not under the supervision of the Director General of Mines - they report directly to the Federal Delegate of the Ministry of Economy, which shares an office with Profeco and every other division of the Ministry of Economy. Mining is seen as just another division.

Q: What do you think about the changes proposed by the new administration and the Pact for Mexico?

A: One problem with the Pact for Mexico is that the changes it proposes will mean more regulations and restrictions for foreign investors, and I do not agree with that. My perspective is that we need to leave the mining law unchanged. If we start to absolutely forbid mining activities in protected natural areas we will be putting a limit on mining activities. There are also many environmental, political, and social problems and it is very challenging to obtain water rights and land access. We need to solve these problems, but not by imposing a general rule. That is why we insist that the mining authorities should have more power. The law can be changed again, but if we do not have a political entity that has the power to make decisions and is capable of taking action, the law will not be more than just written words.