Investment Will Drop to Zero With Electricity Reform: CAMIMEX

If Congress approves President López Obrador's electricity reform that seeks to give the government exclusive control of strategic minerals, investment in mining exploration will be practically null, CAMIMEX said. Moreover, the lithium reserve figures that have circulated are not official, so the true potential of the country is unknown.

Jaime Gutiérrez Núnez, President of CAMIMEX, told La Jornada that the future of the industry and the country is at risk since mining investment will fall to practically zero, which will put a brake on the post-pandemic economic recovery of the country. Gutiérrez explained that the fiscal changes that have been implemented for years have already caused investment for mineral exploration to decrease significantly. According to data from CAMIMEX, the sector went from having US$856 million in mining investment in 2014 to US$399 million in 2020. Gutiérrez stressed that the new electricity reform will become part of the policies that make Mexico less attractive, worsening the situation in this sector.

“It has been two years since we proudly said that no mining concession have been granted, but with that we are mortgaging the future of the country because when current production ends, there will be nothing to continue. The country will freeze. We are certain that if these conditions continue and the reform passes, exploration will fall even more, practically to zero,” Gutiérrez warned.

Gutiérrez said that he does not understand the government's decision for wanting to include lithium in the electricity reform, since it is a mineral that does not transmit energy but only stores it and it is not yet known how many reserves there are in the country. Regarding the rumors among legislators that Mexico has the equivalent of US$100 billion in lithium reserves, the following question arises: “where do they get that information from or why to deceive the population? It is absurd. They are made up numbers, geologically it is clear that we do not know how much lithium is in Mexico. We know that there is lithium but to date it is not economically exploitable since it is in clay, which makes it complicated and expensive,” said Gutiérrez. In addition, the electricity reform is generating more concerns with its strategic minerals focus, which could consider other minerals apart from lithium. “Investors and companies will not want to use their resources in a country where there is a possibility that minerals are expropriated and much less in a country where there are no guidelines on what the industry will be like,” Gutiérrez said.

CAMIMEX acknowledges that there are different positions regarding the electricity reform. The sector respects Mexican authorities and will not break the dialogue until all parties find a middle ground. Gutiérrez added that if investment conditions improve, the country's GDP could increase 1 percent, which is equivalent to US$20 billion in additional taxes.