Mexican Mining Industry Needs New Laws: Detector

Q: How did mining exploration advance in 2021 in Mexico and what new opportunities arose?

A: 2021 was a year of little activity regarding exploration. Production companies kept their existing projects but very few new ones were announced. The first factor limiting exploration was the pandemic. The second was our government, as it became more restrictive regarding permits and procedures. There are projects and money to explore but the lack of governmental permits is preventing them from happening. The third factor hindering activities was insecurity.

Q: What are the main advantages that Detector can offer against its competition?

A: Our main added value is the knowledge and alliances that we can offer, which we use in the making of new geological mining charts and the quantification of resources that the country has. This is the foundation on which national and foreign companies base their investment decisions in Mexico.

We are also working on and supporting projects outside of Mexico. There are opportunities in Ecuador to perform new studies and find new deposits. The government is supporting these activities and investors look for that kind of support when deciding on new ventures.

Q: What advice can you give clients regarding conflict resolution?

A: Sometimes communities can block our activities even when we have the right permits and concessions. We need people to agree with the mine, which is when consultations with indigenous communities come into play. Communities need to be involved and the company needs to keep the future sustainability of the community in mind for the project to be successful. If we do not work like that, exploration will not advance.

However, there is no policy to guide us in our relationship with communities. We will arrive one day, some of them will agree and a document is prepared. But at the end of the day, new groups can appear and stand against the project. We have to work on how to best approach this with the mining authorities, to reach agreements and define how we are going to operate. However, the government must also get involved and be willing to help. Otherwise, there will be no investment.

Q: How has Detector collaborated with the Mexican Ecology Service regarding lithium reserves and other strategic minerals?

A: The government is not giving any contract related to lithium to private companies; everything is being done by the Mexican Geological Service through the Ministry of Economy. Detector has been focusing on geological charts: we do the geological mapping, locate mines and potential areas to explore. We publish our findings and corporations can use them to invest.

Regarding lithium, there are still many doubts as to how this is going to work. First, we do not have a law to exploit lithium or nationalize it. If the government thinks it can exploit lithium by itself, it is mistaken. However, its plans may work through an association with a company that can provide the needed support.

Q: What is your experience with SEMARNAT?

A: Detector just started a project in Veracruz, where we want to drill. We have the money and the exploration plan but we are stuck because SEMARNAT has not granted the permit. In a situation like this, it is impossible to generate jobs and find new deposits. We are trapped in a system in which collaboration between companies and the government is nonexistent. We need to work on building the path that we want to follow. 

Right now, SEMARNAT has to comply with what the president says. We can make a request for a new concession or a new permit and even though we comply with the requisites, SEMARNAT will not grant it because it has a mandate to follow.

Q: What are the main changes needed for Mexico to once again become an attractive jurisdiction?

A: Having a law that clearly explains how to complete a consultation with indigenous communities, where companies need to do it and in what stage of the project would help a great deal. There needs to be an entity that regulates and responsibly manages this process. Mexico is a country with great potential to find new mineral deposits, which means providing investors with legal certainty is imperative.

Q: What are Detector’s main plans and priorities for 2022?

A: Detector wants to keep exploring the country and contributing to the Mexican Geological Service. We are also thinking about branching out to other countries where we have better opportunities or stronger legal certainty to explore. At the end of the day, there are other countries that are more open, like Ecuador or Colombia, that are investing in exploration. These are small countries with great potential, not only in mining but also in oil and gas.

Mexico has to open itself up; everyone agrees that exploration has to keep going in Mexico. The problem is that the president is the one who decides. Ministries might tell us that they will support us but, in the end, they cannot. The government does not cancel concessions but it also does not grant new ones. We have to unlock this, either with a new mining law, a new lithium law or a new consultation law.

Detector Exploraciones is a Mexican company founded in 1997. It provides geology, geomatics and other exploration services to both mining companies and the public sector throughout the country.