Mining Essential to Harness Nearshoring
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Mining Essential to Harness Nearshoring

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Fernando Mares By Fernando Mares | Journalist & Industry Analyst - Tue, 10/31/2023 - 10:10

With a wave of new investments pouring into Mexico due to nearshoring, CAMIMEX calls on authorities to back mining companies, as they are crucial for establishing a strong supply chain for businesses setting up shop in Mexico.

Within the framework of the XXXV International Mining Convention, Jaime Gutiérrez, President, CAMIMEX, urged authorities to support mining companies as they supply at least 70 productive sectors in the country, as well as contributing to over 696 communities in 212 municipalities along Mexico. According to Gutiérrez, the relevance of the mining sector has reached another level due to nearshoring, which will require more minerals for the companies establishing in the country. 

Mexico remains among the Top 10 producers of over 16 minerals and metals in the world. However, industry insiders have noticed a decrease in overall mineral production, which is attributed to the global context, but also to internal factors, such as changes to the Mining Law. 

Industry experts believe that the most worrying changes are in the process of obtaining mining concessions, which will now be granted exclusively through tenders conducted by the Ministry of Economy (SE). Additionally, the duration of mining concessions for exploitation was reduced from 50 to 30 years, with the possibility of a 25-year extension, making the maximum concession period 55 years, under the condition of not violating any government criteria. After meeting this deadline, the concession holder will have the opportunity to participate in a new tender for the same mining plot. In this case, they will have priority in the selection process, if they match the highest bid. The concession will be granted for a final term of twenty-five years, which means concession holders have the possibility to hold the concession for a maximum of 80 years. 

Gutiérrez insisted on promoting policies that truly back the sector and do not limit responsible mining. He emphasized that the sector does not expect the government to give companies advantages that do not correspond to the sector, but to make it truly competitive on the back of the upcoming demand. 

Nearshoring is not only putting traditional minerals under the spotlight but also minerals that have not yet been produced in the country, like lithium. While companies are yet to produce lithium carbonate, essential for the manufacturing of batteries for electric vehicles, some industry experts bet on policies to start harnessing the advantages of the mineral while the legal framework and the markets are developed. 

During a roundtable to discuss the potential creation of the Organization of Lithium Producing and Exporting Countries (OLPEC), Andrés Robles, Vice President of Government and Institutional Relations, AIMMGM, suggested that since Mexico’s clay deposits are currently unexploitable, the country should start working on becoming a marketer, rather than a producer, while technology evolves, to capitalize on opportunities brought by nearshoring. 

The mining sector recognizes that the current status of the legal framework does not favor investment attractiveness, but different associations have expressed their willingness to collaborate with policymakers to improve the understanding of the sector and also to reformulate rules to better follow the law. "Nearshoring is an opportunity to boost the mining sector’s growth. We are aware of the challenging environment, but as it has happened in other moments in history, we have the strength to move forward," said Humberto Vázquez. President, AIMMGM.



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Photo by:   Nicole Geri, Unsplash

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