No More Open-Pit Mining Permits: Ministry of Environment

Mexican authorities announced that no more permits for new open-pit mining projects will be issued during López Obrador’s remaining government term, set to end in September 2024. Experts stressed that the ban on new permits poses a threat to investments and developing mining companies.

Mexico’s Minister of the Environment, María Luisa Albores, stressed that no more concessions will be granted for open-pit mining projects due to the negative impact on the environment and the adverse effects on the health of communities living nearby. In addition, the minister stated that many of the concessions already granted threaten 68 protected natural areas. Therefore, López Obrador’s government has ordered the creation of five new natural reserves, increasing the protected areas to two million hectares.

Several experts argue that the government maintains its misconceptions about the mining industry, which threatens the sector's performance and investment. Ralph Shearing, Executive President, Altaley Mining, said the ban on open pit mining is unnecessary and causes significant damage to the industry, as he sees plenty of value in a well-run open pit mining project. “All mining companies need to operate in a responsible manner these days. Therefore, the quantity of economic benefit from any mine is great for the communities and local areas,” said Shearing.

Germán Larrea, CEO of Grupo Mexico, stressed that nowadays most open pit mining projects are environmentally friendly since all the plants are modern and use cutting-edge technology. He also stressed that if mining projects are carried out responsibly, the environment and wildlife can be restored after they are finished.

In 2021, Albores said that all open pit projects have been stopped in the country, arguing that the institution had not granted any permits for open pit mines since President López Obrador took office. The measure is taken amid a political environment already said to be unfavorable for mining companies, with López Obrador freezing all new concessions and nationalizing the country’s budding lithium industry.

Although the environmental ministry SEMARNAT has blocked at least four such projects since then, it did approve a permit for the Camino Rojo project, owned by Orla Mining, in 2020. Furthermore, Southern Copper confirmed that it received the environmental permits for its US$159 million open-pit Pilares project.

Currently, Mexico has various underground mines. However, its major actives are open-pit focused, including projects of leading gold producers such as Newmont’s Peñasquito, Fresnilllo’s Herradura, Torex Gold’s El Limón-Guajes and Agnico Eagle Mines' Pinos Altos.

Other key mining projects are also based on open pits, including Teck Resources' copper-zinc project in San Nicolás, valued at US$842 million, Chesapeake Gold's US$359 million Metates gold project and Southern Copper’s US$2.9 billion copper-gold project in El Arco, the biggest open pit mine still waiting on its SEMARNAT permits.