New Regulations Result in Investment Loss of US$4.5 Billion

Karen Flores, Director General, CAMIMEX, emphasized that in recent years, mining exploration in Mexico has declined by 50%, posing a significant risk to the future of the sector. She underscored that the challenges extend beyond exploration and encompass project development, citing the delay in the issuance of 220 environmental permits by SEMARNAT. Moreover, proposals such as the prohibition of open-pit mining could increase uncertainty for both existing and prospective companies aiming to invest in Mexico.

"The constant change in laws is also an issue. Just as companies were adapting to the Mining Law, new proposals like the ban on open-pit mining, which lacked any solid technical or logical foundation, were introduced. There is no substantiated evidence indicating that open-pit mining poses greater risks to the environment or to worker safety. Open-pit mining now constitutes 60% of operations, with underground mining comprising 40%. If this law were to pass, the economic and employment impact on the sector would be significant. We firmly believe that such a ban should not be approved, as it lacks foresight and rationale," said Jaime Gutierrez, President, CAMIMEX, in an interview with MBN. 

Flores emphasized that the ban would not only impact the mining sector but also extend to other industries like construction. It would also raise production costs across various sectors, resulting in significant economic losses estimated at around MX$40,000 million (US$2.3 million) in taxes and MX$14 billion in foreign exchange earnings annually.

Despite growing concern in the sector since the announcement of the proposal to ban open-pit mining, experts have urged the sector not to be alarmed, as the reform has not been voted on or debated. Experts stressed that they are confident that the new reform will be modified, as better understanding between the government and the sector arises. "I expect it will not even be discussed. I think it is going to be used to promote social issues, but I do not think it is not going to be approved. MORENA and its allies do not have the necessary votes to pass these reforms,” Pablo Méndez, Managing Partner, EC Rubio, told MBN.