Open-Pit Mining Ban Advances; Final Vote Expected in September

On Wednesday, a committee in Mexico's lower house of Congress approved several of President López Obrador's constitutional reforms, including measures to ban open-pit mining, fracking, and water concessions in areas with limited water availability. These proposals will be taken up for discussion by the full lower house in September, aligning with the transition of deputies and senators in Congress.

In Mexico, constitutional amendments require approval by a two-thirds majority in both the Chamber of Deputies and the Senate, as well as by a majority of local congresses. Experts suggest that the reforms are likely to pass, as MORENA and its allies are expected to control between 346 and 380 of the 500 seats in the Chamber of Deputies. However, in the Senate, where MORENA and its allies are projected to hold between 76 and 88 of the 128 seats, for which it remains uncertain whether they will achieve a qualified majority.

The proposals, particularly the ban on open-pit mining, have faced significant opposition as open-pit operations account for 60% of the value of Mexico's national mining and metallurgical production. CAMIMEX has warned that such a ban could lead to a 1% contraction in the country's GDP and jeopardize approximately 200,000 jobs.

CAMIMEX has advocated for the continuation of open-pit mining under a regulatory framework that ensures environmental protection and community welfare, rather than imposing an outright ban. "Open-pit mining should NOT be banned but should be promoted to strengthen Mexico’s position as a producer of essential minerals. It is a serious activity practiced worldwide, and operating it responsibly and safely is the duty of all stakeholders. The responsible industry should not be penalized, nor should the country’s competitiveness be limited," stated CAMIMEX.

Mining leaders believe that president-elect Claudia Sheinbaum will adopt a more industry-friendly stance compared to López Obrador’s administration, potentially creating a more favorable environment for mining companies. Mariano Calderón, Partner, Santamarina + Steta, views Sheinbaum’s cabinet positively, citing its members’ qualifications and experience. "We do foresee a change in the relationship with the private sector toward a more positive and open direction.” 

Experts emphasized that even if the ban on open-pit mining is approved, it is unlikely to be maintained in the long term. “We expect a ban on open-pit mining to be approved, with the possible exception of lithium. This will significantly affect the industry, as the country's economy cannot survive without mining,” Cesar Fernandez, CEO, CIMA Consultores, told MBN.