New US, Mexico Leadership Signals a Promising Future for Mining

The outlook for the North American mining industry appears increasingly stable and well-supported as new administrations in both Mexico and the US appear to be more open to mining activities and collaboration with the private sector, which could give the industry a new boost. Both countries are significant contributors to different metals’ markets, with the estimated value of mineral production in the United States reaching approximately US$105 billion in 2023, positioning the country as the second-largest mineral producer globally with 2.2 billion t. Iron and steel scrap accounted for the largest share of total production value (54%), followed by gold (12%) and aluminum (10%). Meanwhile, Mexico leads in global silver production with 202Moz in 2023 and ranks among the Top 10 producers of gold, fluorite, bismuth, celestite, sodium sulfate, wollastonite, lead, molybdenum, diatomite, cadmium, graphite, barite, salt, gypsum, manganese, and zinc. Experts, however, caution that significant challenges remain in advancing the sector’s growth and resilience in each country.

United States

Following Donald Trump's victory in the US elections and the Republican Party securing a majority in Congress, experts anticipate increased support for the mining sector as the administration focuses on reducing reliance on foreign mineral supply chains. 

Trump’s strong support for the mining industry signals a shift in priorities compared to the Biden administration. Trump is expected to prioritize the development of domestic mining infrastructure, including the establishment of additional mines, processing plants, and refineries. Experts also predict that the next administration will streamline permitting processes and introduce tariffs to incentivize domestic mineral production. Gregory Wischer, Founder, Dei Gratia Minerals, emphasized that the administration is likely to focus on reshoring the entire mineral supply chain, particularly mineral extraction.

While mining companies are optimistic about the favorable political climate, industry leaders stress that translating this momentum into tangible progress remains a significant challenge. "The political environment is certainly favorable for the mining sector in the United States, but despite the encouraging rhetoric, substantial barriers remain in turning that into actual investments. The gap between high-level statements and the practical ability to make investment decisions is substantial," said Morgan Bazilian, Director, Payne Institute.

Beyond stringent regulatory constraints and complex permitting processes, the US mining industry faces supply chain vulnerabilities due to heavy reliance on foreign sources for critical minerals. Labor shortages and a skills gap also hinder productivity, as fewer young professionals enter mining careers. Rising operational costs, driven by inflation and escalating energy expenses, further strain profitability and investment. The push for sustainability and decarbonization adds yet another layer of pressure, as mining companies require significant investments and technological innovation. Experts pointed out that these challenges will demand a coordinated effort among industry stakeholders, government agencies, and communities to build a resilient and sustainable US mining sector, stated Catherine Friday, Global and Asia-Pacific Government & Infrastructure Industry Leader, EY.

Mexico

Despite President López Obrador’s administration freezing concession grants, slowing permit approvals, and proposing a ban on open-pit mining, the sector remains optimistic about Claudia Sheinbaum’s new administration. “We trust in an open and constructive dialog with President Claudia Sheinbaum Pardo’s administration to address the challenges and opportunities facing the mining sector, while also recognizing the industry's role in a broader national vision,” Rubén del Pozo Mendoza, President, AIMMGM, stated.

Analysts predict that while Sheinbaum is likely to follow many of López Obrador’s policies, her administration may diverge on specific issues. A recent meeting between Del Pozo and Ministry of Economy (SE) officials showcased an open dialogue with the private sector on critical issues, including the proposed ban on open-pit mining. José Sevilla-Macip, Senior Research Analyst, S&P Global Market Intelligence, has expressed optimism over the omission of an open-pit mining ban in Sheinbaum’s initial commitments. He noted that Sheinbaum may avoid advancing the ban, given the economic significance of Mexico’s open-pit mines, which is key to the country’s GDP. 

If the ban does proceed, Sevilla-Macip doubts it would be applied retroactively, as this could lead to legal action from mine owners. He also explained that the proposed ban is not absolute, as it provides the executive branch with the authority to grant exceptions, giving the government flexibility to permit open-pit mining under certain conditions.

Peter Megaw, Former Chief Exploration Officer, MAG Silver, suggested that Sheinbaum might not immediately clarify her mining policies. He noted that other urgent issues, such as the challenges posed by drug cartels, could delay mining topics. "Nearly everyone I speak with in Mexico anticipates it will take six to nine months to understand her approach. The critical question is how much and how quickly she will diverge from López Obrador," Megaw added.

In addition to the potential open-pit mining ban, Mexico’s mining industry is facing other concerns, including the judicial reform. In September, the Senate approved the judicial reform, which mandates judges to be elected rather than appointed. While this system has not yet been implemented, analysts suggest it could impact how the judiciary handles mining disputes. 

“We are uncertain about what is going to happen next. The reform will fundamentally reshape Mexico's judiciary, and therefore reshape a new country. We all aspire to have the best composition for the Judiciary, the Legislative and the Executive branches of our governments. However, the independence, reliability and professionalism of the Judiciary is now at a stake,” said Rubén Cano Balcorta, Founding Partner, CR Legal Partners Mexico.