Mining Concessions, the Way to Recover the SectorBy María Fernanda Barría | Mon, 03/01/2021 - 15:54
President López Obrador repeated that there will be no more concessions in Mexico, which was one of his promises during the electoral campaign. This, however, has been described as one of the main challenges for the sector, as shown by industry figures for 2020. According to the Mining Chamber of Mexico (CAMIMEX), in 2020 the Mexican mining sector only captured US$2.5 billion in investment, the lowest figure in the last 13 years.
“This is a significant political decision. The president has been conclusive in stating that he will not grant new mining concessions,” said Francisco Quiroga, former Undersecretary of Mining. Quiroga also noted that proper preparation could help companies overcome the obstruction and move forward with their projects. “If a foreign company has a project that meets the standards from an economic, social and environmental point of view, I am sure there will be a good reception and the government will admit new concessions,” he explained.
For Quiroga, some mining companies might be tempted to take legal proceedings but in his opinion that could be detrimental. “Let us remember that Congress can change the law and, right now, the leading party supports the president. I would not recommend taking the legal route or a tough approach,” he added.
The cessation of mining concessions is one of the critical risks facing mining companies in Mexico. During Mexico Mining Forum, Douglas Cavey, Vice President of Corporate Development at Defiance Silver, stated that the country's administrative procedures represent a difficulty for the industry. “The cost of communicating with the federal government is quite high and prohibitive for smaller or independent mining companies,” he added.