Mexican Mining Companies Bet More on Underground Projects

Mining companies in Mexico are more often opting for underground operations, as the Mexican government has decided to deny permits for open pit operations in an effort to reduce the negative social and environmental impact of such projects. However, many mining companies decided to keep trying to advance their open pit projects.

Last year, Minister of the Environment María Albores confirmed a de facto ban on new open pit mining projects ordered by President López Obrador. “The government of Mexico maintains its commitment to not award new permits for open pit mines following the high quantity of permits granted during the neoliberal period. This reinforces [the government’s] commitment to communities toward their health and healthy environment,” the environmental ministry stated.

Currently, mining companies have explored expanding their operations underground because the permitting process is seen as faster and simpler. For instance, Endeavour Silver announced that it would focus on developing the Pitarrilla underground project, one of the most important silver deposits in the world. “We think this is more likely to prosper considering metal prices and the political climate in Mexico. It is a great mining jurisdiction, but underground mining is viewed more favorably than open pit mining, and not just in Mexico, but globally,” said Dan Dickson, President, Endeavour Silver.

In addition, GoGold Resources is studying the underground potential of the Los Ricos Sur Project to see if it is the best option. “Right now, getting permits in Mexico is much easier by operating underground. We think underground mining would speed up permitting and our ESG perspective,” explained Brad Languille, President, Gogold Resources. Orla Mining announced that it is also considering an underground operation for its Camino Rojo Sulfide project. Although the company has not ruled out open pit mining, it said it will opt for the most convenient option in terms of tonnage.

Although many companies have opted for more underground expansions, several projects have decided to stay the course. For instance, Tec Resources, Agnico Eagle's US$842 San Nicolas project, Chesapeake Gold's US$359 million Metates project and Southern Copper's US$290 billion El Arco project will continue with their open pit plans. Moreover, Zacatecas Silver said that despite SEMARNAT's opposition, the company will seek to obtain the required environmental permits for its Esperanza project.