Mining Sustainability Fund in the Works
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Mining Sustainability Fund in the Works

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Paloma Duran By Paloma Duran | Journalist and Industry Analyst - Thu, 11/04/2021 - 15:04

An initiative was presented to the Chamber of Deputies to create a Sustainable Mining Fund to address the negative social and environmental impact generated by mining. The initiative joins the many others focused on reactivating the Mining Fund for the direct benefit of mining communities, which have been affected since 2019.

Deputies of the Citizen Movement party, Amalia García and Jorge Álvarez, proposed the creation of a fund to replace the Mining Fund canceled in 2019 by MORENA, President López Obrador's party. According to García and Álvarez, current legislation no longer directly benefits mining communities from the taxes collected from mining companies. “We seek for the Federal Law of Rights to establish a new fund where 62.5 percent of the resources go to the Ministry of Education (SEP) and the rest to environmental support and rehabilitation of affected areas," Garcia said.

The distribution of the new fund will be established according to the value of the extractive activity in the area with respect to the total value of the activity at the national level, the deputies explained. Furthermore, according to the initiative, the states must publish quarterly information on the resources allocated to the new Sustainable Mining Fund, in addition to submitting a report to the Ministry of Finance.

Previously, other parties have sought to reactivate the Mining Fund to allocate resources directly to the communities and not to the SEP, since the Ministry already has an exclusive budget. In September, the federal PAN deputy of Zacatecas Miguel Ángel Varela presented an initiative to reform the Federal Law of Rights to reactivate the Mining Fund, which sought to allocate 77.5 percent of its profits to the Sustainable Regional Development Fund of the Mining States and Municipalities, while 23.5 percent would go to the host entity of the project.

In October 2020, the senate approved the elimination of trusts and funds from the federal government. The initiative sought to cede control to the Ministry of Finance over resources to manage them more efficiently and ensure that mining companies really contribute to the benefit of the country. With 65 votes in favor, 51 against and two abstentions, it was ruled that 109 trusts would be reviewed, adjusted and eliminated, including the Mining Fund.

Photo by:   Westark

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