Mexico Mining: Promises vs. Regulatory Reality for Exploration

During the inauguration of the XXXVI International Mining Convention, attendees heard firsthand the message that would be widely reported by digital newspapers the following day: “Marcelo Ebrard, minister of economy, announced at the International Mining Convention in Acapulco that large-scale mining exploration will resume in 2026, pending permits will be expedited, procedures streamlined, and investment facilitated.”

This announcement might appear promising, were it not for the sobering memories of November 2018 when the mining sector celebrated the creation of the Undersecretariat of Mining, only to feel deceived 21 months later when, in September 2020, the position was eliminated, and its short-lived holder departed for Germany as Mexico’s ambassador, remaining disconnected from the sector’s current challenges.

Reality underscores the argument advanced by the Mexican Geological Service (SGM) since the mining reforms of May 2022, which left SGM as the sole entity authorized to conduct the crucial exploration phase. With a budget for 2025 set at MX$1 billion (US$54 million), SGM finds itself as David confronting the Goliath of exploration demands required to meet the nation’s metal needs.

For context, in 2013, foreign investment in mining exploration in Mexico alone reached US$6.58 billion. The 2022 Mining Law reform significantly undermined this, with SGM tasked to accomplish at least as much as foreign investors once did, but now with resources amounting to merely 0.8% of previous private investment figures. Regrettably, the well-intentioned efforts of a specialist in public administration, educated at France’s École Nationale d’Administration, encountered further cold reality.

Five fundamental aspects require serious attention: 1) Effective communication with stakeholders to convey the high degree of uncertainty inherent in exploration; 2) Mining exploration, in most cases, does not require environmental impact assessment authorization; 3) The Preventive Report modality can render environmental management highly complex and bureaucratic; 4) Exploration projects generate waste, necessitating authorization as hazardous and special waste generators before SEMARNAT and state governments; 5) Water use must adapt to innovative modalities — anticipated implementation of the General Water Law will make securing water resources a major challenge for any project.

Let us examine these issues in detail.

A robust communication strategy is essential. Communities, upon noting teams of geologists surveying the area, often imagine themselves atop Moctezuma’s Treasure, or El Dorado. In reality, it is akin to finding a needle in a haystack. Every additional attempt increases the odds of success, yet most haystacks are devoid of real value. Unless this is understood, communities may develop expectations that rarely materialize. Indeed, of every thousand exploration projects, only one is likely to evolve into a commercially viable mine — a well-worn phrase, yet undeniably true. Thus, communities should become partners in the exploration process, sharing the risk that, after considerable effort, the deposit may prove unviable.

With respect to regulatory management, it is established that, under a strict reading of the General Law of Ecological Balance and Environmental Protection (LGEEPA) and its Regulation on Environmental Impact Assessment (REIA), the exploration phase does not, under certain conditions, require authorization.

The penultimate paragraph of Article 28 of the LGEEPA delegates to REIA the responsibility of determining which works or activities do not generate significant impact and thus are exempt from environmental assessment. In effect, REIA requires prior authorization for mining exploration, excluding gravimetric, superficial geological, geo-electrical, magnetotelluric, magnetic susceptibility, density prospecting, as well as drilling, trenching, and rock exposure — provided these occur in agricultural, livestock, or wasteland zones, within dry or temperate regions featuring specific vegetation types, and outside protected natural areas.

Consequently, exploration in regions matching REIA’s climatic and vegetation criteria need not obtain SEMARNAT authorization, at least with regard to mining activities.

Unfortunately, consultants and law firms often misinterpret LGEEPA's provisions. Article 31 stipulates that authorization for environmental impact may require a Preventive Report (IP) rather than a full Environmental Impact Statement (MIA) if relevant Norma Oficial Mexicana regulations exist, such as NOM-120-SEMARNAT-2020. Unscrupulous consultants may erroneously advise seeking unnecessary authorization via an IP.

Care is warranted. If vegetation clearance for a drilling pad exceeding 720 square meters is planned, then environmental authorization is required under LGEEPA Article 28, Section VII, as is a Change of Land Use of Forestry Lands (CUSTF) under the General Law on Sustainable Forestry Development.

A worst-case scenario emerges if an operator holds unnecessary authorization for drilling but lacks legitimate permission for vegetation clearance, and may remain liable even after unsuccessful drilling and subsequent remediation.

Compounding challenges, such consultants demand submission of precise geographic coordinates for access roads, pads, warehouses, and other surfaces, despite the iterative nature of exploration, whereby exact locations cannot be determined before fieldwork, and landholders may deny access, forcing operational changes.

Consultants may propose submitting coordinates for only a handful of pads, assuring the option to pursue further IPs as needed.

Moreover, a CUSTF permit application now may trigger public consultation, including the necessity for free, prior, and informed consent by ejidos, communities, and Indigenous or Afro-Mexican peoples.

Regarding waste management, exploration logistics must consider regulatory requirements both for hazardous waste (federal authorization, possibly with interim storage) and for other materials (special waste registration with state governments).

Finally, water use presents acute concerns. The volume required for drilling varies, from fractured strata making water recovery impossible, to gold and silver projects where water recirculation is avoided to prevent “cross-contamination” (not ecological, but affecting resource certification). Rural projects must source water legally; you cannot simply purchase from nearby private wells unless these wells hold concessions permitting industrial use, under penalty of forfeiture for non-compliance. Legislative initiatives are now addressing these issues.

What are the alternatives for water? Technology stands out. The use of wastewater treatment plants, supplied by local community effluents, may yield water of certification quality and, ultimately, these plants can be donated for community use.

All these challenges apply equally to SGM and private enterprises pursuing joint ventures, as discussed at the 2025 Mining Convention. With the recent publication of ISO 17298:2025, concerns over biodiversity will require those seeking finance to invest more heavily in environmental considerations.

The Mexican government requires a rational strategy, as it cannot expect a productive coexistence between a policy that demands critical minerals and one constrained by a statist vision, fed more by rumors than by verifiable truths about the impacts of mining. On the other hand, the mining sector only asks for clear rules to be applied in a timely and proper manner.