News Article

How do We Close the Gap in Mexico’s Mining Industry?

By Cas Biekmann | Wed, 08/25/2021 - 12:14

You can watch the video of this presentation here.

While it is true that Mexico’s mining industry remains a major asset to the country, industry experts agree that it has lost some of its former sheen. Through combating misinformation, establishing dialogues, protecting the environment and sharing many benefits, Mexico can begin to close the gap.

It is hard to understate the importance of the global mining economy, one which for the past centuries has been a crucial source of essential raw materials. “Resources are the basis of the country's development and, therefore, mining is fundamental. If we stop mining, other industries will collapse,” said José Jabalera, Director of Mine Development of Ministry of Economy.

Today, Mexico is ranked as a Top Ten producer of 17 minerals. In regards to silver, Mexico even ranks first, but it is similarly important in the production of gold, fluoride, copper, lead and other minerals. The mining industry generates huge amounts of income for Mexico. For instance, mining it is the fifth largest  economic activity in the country as of 2020, said Fernando Alanis, President of Mexico’s mining chamber CAMIMEX. Since mining activity often occurs in remote areas, it can be an important lever for economic growth in these areas as well.. “Mining can boost the economic reactivation for communities far away from cities. It is therefore an important part of Mexico’s development,” Jabalera said.

Last year the mining industry did not perform as it was expected and experienced some low points as a result of the global pandemic, a lack of granted concessions and a governmental regulatory uncertainty slowed down investments. This resulted in having 24.1 percent less investments than in 2019 for a total of US$3,532 billion. “Mexico dropped from the 20th most attractive mining country down to the 42nd place in 2020. This is reflected in how much investment Mexico attracts. The pandemic has had its effect, but investments have dropped by more than half since 2012,” said Alanis. The head of CAMIMEX also agrees with the other experts that certainty is the key concept toward improvement. By achieving a greater financial, judicial, social and environmental certainty, Mexico’s mining sector can make an important headway.

Nevertheless, fostering certainty is of course much easier said than done. Efraín Alva Niño, General Director of Technical Support and Head of the Extractive Activities Coordination Unit of the Ministry of Economy, believes that spreading accurate information about the industry and its activities is of the essence.

“Mining misinformation must be urgently addressed. Mexico's has a world-class mining sector and our task is to convey that message to the public,” he said. Even though the country is competitive on the global scale, many remain unaware of the benefits the industry could bring and instead remain antagonistic toward any type of mining operations. Recent news such as the collapse of a coal mine in Coahuila dominate the news cycle, whereas safe operations that operate without notable accidents remain unreported. Jabalera concurs: “We need hard numbers and facts. What are the effects and what do these numbers mean? With good information, one can highlight wat is really happening.”

This information must be used to facilitate a dialogue between all stakeholders of mining operations and the industry as a whole, in which misinformation can be countered with a more adequate representations of the facts. “We must collect reliable and robust data to initiate a national dialogue with all stakeholders, especially communities, to identify what is being done well and what we can improve,” said Tonatiuh Herrera, Undersecretary of Promotion and Environmental Regulations at the Ministry for the Environment and Natural Resources (SEMARNAT), who took on the role in September in 2020.

“This topic cannot be addressed within the industry alone, it is a question of having a national dialogue,” Herrera said. “People should not be afraid to establish a dialogue. We must listen to all actors involved and know we will not agree on every single issue. Nonetheless, we need to be open and listen very well.”

Herrera highlighted that Mining in Mexico was not without risk, with several mining sites having caused environmental pollution through a fault in their operation. “A dialogue is a great analogy, but it should really be a like a flowing conversation,” agreed Alva.

Experts emphasized that mining operators need to do everything in their power to ensure the  environment remains protected. “Environmental and security requirements have to be met in full, without discussion,” stressed Herrera. It is precisely here that mining companies have room for improvement, said Ivan García, Head of the Technical Coordination of the Senate's Mining Commission of Senate, focusing specifically toward the sharing of social benefits. “The amount of work done to benefit society is not enough yet,” he said. “It is hard to justify mining if there are no clear benefits for the communities surrounding these operations.” Even though experts agree on this issue, finding out how exactly this sharing should happen can be tricky. “The law speaks of providing reasonable benefits to the communities, but what exactly is reasonable is not fully defined,” explained Herrera. Once again, adequate information and a flowing dialogue are essential to show mining companies the way.

“We need to strategize adequately to meet these social and environmental issues and take international best practices in account. By facilitating this dialogue, we can foster scenarios where every actor wins,” concluded García.

Cas Biekmann Cas Biekmann Journalist and Industry Analyst