Mexican Mining Industry Underperformed in 2021
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Mexican Mining Industry Underperformed in 2021

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Paloma Duran By Paloma Duran | Journalist and Industry Analyst - Thu, 01/13/2022 - 00:48

In 2021 the mining industry in Mexico performed worse than expected since the lack of concessions and permits hampered the arrival of incoming investments as well as the development of important mining projects throughout the country. CAMIMEX said that if the Mexican government establishes a better framework, the sector would attract five times its investment value. 

CAMIMEX reported that despite having a better market environment in 2021, the performance of the Mexican mining sector worsened due to government decisions and legal uncertainty. In 2021, the sector attracted US$4.246 million, higher than what was collected in 2020 but 15.6 percent below what was expected, which was US$5.03 billion.

“One of the factors that has discouraged investments is the lack of legal certainty. When there are conditions in a legal framework in which investors come to put their money and half of these change, this scares away investments,” said Jaime Gutiérrez Núñez, President of CAMIMEX.

In addition, Gutiérrez said that the lack of concessions and permits is impacting the arrival of new investments and even driving away certain companies with projects in Mexico. Gutiérrez stressed that only 30 percent of the territory has been explored, for which its potential is tremendous. However, these challenges are causing the country to miss opportunities worth US$25 billion.

In addition, there are currently 29 environmental permits pending from SEMARNAT and 34 from CONAGUA. Pablo Méndez, President of the Chihuahua Mining Cluster, said that this is one of the most pressing challenges facing the sector and stressed that misinformation is often the main reason for the denial of permits. “The greatest challenge that the mining industry faces is not related with the permissibility of the authorities when approving or denying the applications of their projects or with the recognition of the rights of the Ejidal and indigenous communities, but with the current stigmatization that exists on mining activities in our country, which, unfortunately, is generally unfounded,” said Méndez.

For his part, Tonatiuh Herrera, Deputy Minister of the Environment, said that SEMARNAT did not stop granting permits, instead, authorities are asking for higher standards to comply with. “We need to have strict evaluations. The environmental and safety requirements must be met in their entirety, without discussion.” Herrera said it is true that SEMARNAT has a backlog of evaluations that it needs to fix; however, miners have a duty to present responsible projects.

Gutiérrez said that if the country promotes a reliable and efficient legal framework and better incentives, the sector could generate 50,000 additional jobs and attract five times its investment value. However, the misconceptions surrounding the sector must first be combated, otherwise the industry will not develop at the required pace.

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