An anti-mining sentiment, expanding from Latin America to European countries like Portugal, raises significant concerns in the mining sector, as opposition jeopardizes the continuous extraction of essential minerals, potentially disrupting the global supply chain necessary for advancing sustainable energy initiatives.
On May 8, 2023, the federal government published modifications to the Mining Law reform, the most worrying being changes in the process to obtain new concessions, which will now be granted exclusively through tenders conducted by the Ministry of Economy (SE); the duration of mining concessions, which was reduced from 100 to 80 years; and labeling exploration a state-exclusive activity carried out by the SGM, industry insiders have stressed.
In April 2022, the government had already nationalized lithium exploration and exploitation, and by August 2022, it published the decree for the creation of LitioMX, a public decentralized organism that will lead the exploration, exploitation, and harnessing of lithium.
President López Obrador justified these reforms by asserting that the mining sector had been irresponsible in managing concessions, causing environmental and social impacts. He emphasized that lithium extraction is closely tied to what he terms "energy sovereignty." Industry insiders, however, have labeled López Obrador's stance as an anti-mining narrative, which has resulted in more than 500 amparos filed by national and foreign companies.
The only company with the potential to extract lithium, Ganfeng Lithium, saw its mining concessions canceled in October 2023. The government said the cancellation was due to non-compliance with the minimum investment obligations between 2017 and 2021, as reported by MBN. As a result, Ganfeng Lithium’s Mexican Subsidiary, Bacanora Lithium, has suspended the development of its plant in Sonora.
According to Peter Secker, CEO and Director, Bacanora Lithium, the project's schedule was altered and put on hold once the government expressed its intention to cancel the concessions. Furthermore, the company said it will use all legal resources to defend its project, but did not rule out a possible public-private partnership with the government to develop its Sonora plant. Should the government accept, the country can finally become a producer of the highly valued mineral, albeit within 20 years.
The federal government's stance towards the mining sector, coupled with the "energy sovereignty" narrative, is perceived as a significant threat by industry insiders. They fear that such policies will likely diminish the global competitiveness of the Mexican mining sector, potentially leading international companies to withdraw their investments from Mexico. This has a direct impact on the supply of essential minerals, including copper, silver, and lithium, critical components for the ongoing electrification trend.
Panama’s Anti-Mining Demonstrations
Mexico is not the only country where mining operations have faced struggles. On Oct. 20, 2023, the government of Panama and the Canada-based copper producer First Quantum signed a new contract to extend the company’s mining concession for the Cobre Panama Mine for an additional 20-year term. According to Reuters, the company’s activity accounts for 1% of Panama’s copper production and over 5% of its gross domestic product, making Cobre Panama the largest open-pit project in Central America. However, Panama citizens consider the agreement as a continuation of a series of irregularities similar to those allegedly present in the 1997 original agreement.
The agreement between the Panama government and First Quantum triggered violent anti-mining protests that almost halted Panama City’s activity. While demonstrations have not completely disrupted First Quantum operations, the company announced it reduced copper ore processing since demonstrators have blocked the mine’s Pinta Rincon port.
Portugal Anti-Corruption Protests
Portugal has experienced a wave of anti-mining demonstrations triggered by corruption accusations against Prime Minister Antonio Costa, leading to his resignation on Nov. 7, 2023. The protests, reported by local media, reflect public discontent with the administration's alleged corruption in handling the concessions granted to Lusorecursos and Savannah. These concessions involve extracting battery-grade lithium and developing four open-pit lithium projects, respectively, in northern Portugal, near the border with Spain. This scandal has led anti-mining groups to urge the government to halt and reassess lithium projects.
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