The Presidential Election and Its Impact on Mining

On June 2, general elections were held in Mexico, where a total of 629 federal positions were elected: 500 seats in the Chamber of Deputies, 128 Senate seats, and the Mexican presidency, during which, Claudia Sheinbaum Pardo, from the political coalition"Let's Continue Making History, was elected as president, representing the same political parties that brought President Andrés Manuel López Obrador to power in 2018. This coalition includes Morena, the Green Party (PVEM), and the Labor Party (PT).

Regarding the chambers of Congress, the mentioned coalition will control the majority of seats in both the Senate (though without a qualified majority) and the House of Deputies (with a qualified majority); additionally, this coalition secured a majority in 27 state legislatures, granting them extensive legislative power at both the federal and state levels.

This political landscape is particularly important as these majorities provide the coalition with a virtual "free pass" to approve any initiative or law reform, including constitutional amendments. This implies the potential for significant changes in several areas, including mining, without facing any strong opposition in Congress.

As such, it is important to remember that, just over a year after the publication of the decree on reforms to the Mining Law, the National Waters Law, the Ecological Balance Law, and the General Waste Law, these are currently under review by the Supreme Court of Justice of the Nation. This review was provoked by an action of unconstitutionality filed by opposition parliamentary representatives. The mentioned reform was repealed, modified, and added several provisions that substantially affect the mining industry's operations.

Among the most relevant provisions of this reform are the mandatory prior consultation with Indigenous communities and original peoples linked to obtaining consent before granting new concessions; the reduction of the validity period of mining concessions; the restriction of mining in protected areas and areas with water stress; and the prohibition of underwater mining, among other measures. These modifications have raised significant concerns in the mining sector, which believes that these new regulations could significantly hinder mining operations in Mexico.

However, due to the action of unconstitutionality, there is a possibility that the Supreme Court will declare the reform invalid due to violations committed during the legislative process. This possibility has generated expectations in the sector that the court will restore the regulatory framework prior to the reform.

Despite a possible favorable ruling from the court, Dr. Pedro Álvarez Icaza, who served as an environmental liaison during the electoral campaign of the president-elect, has expressed his intention to reintroduce the text of the law in case the court invalidates it. This means that, even if the Supreme Court of Justice of the Nation declares the reforms unconstitutional, the new government could attempt to approve them again, leveraging the legislative majority of its coalition.

On the other hand, the current government of President López Obrador has submitted before the National Congress several reforms, including a modification to Article 27 of the Constitution to prohibit the execution of activities for the exploration, exploitation, beneficiation, use, or utilization of minerals, metals, or metalloids in open-pit mines. The president justifies this amendment with the argument of alleged environmental damage and excessive water consumption generated by these activities.

Specialists and analysts in the mining sector have pointed out that the decision to operate a mine under the open-pit modality is not arbitrary but a determination based on exploration studies of the terrain indicating that this is the most viable way to extract mineral resources. President-elect Sheinbaum has not confirmed whether she will continue with this specific policy, but her environmental liaison, Pedro Álvarez Icaza, has reiterated the intention not to grant new authorizations for open-pit mines. This stance generates uncertainty in the mining sector, which fears a further tightening of regulatory policies under the new administration.

In light of this situation, representatives of the mining sector in Mexico have expressed their concern and called on the president-elect to strengthen a sector that they say  was neglected during the current six-year term. They have requested the government to improve the regulatory framework to streamline permits and authorizations and to allow the development of exploration activities, thus ensuring the future of mining in Mexico. Karen Flores, general director of the Mexican Mining Chamber (CAMIMEX), has emphasized the importance of these measures to guarantee the stability and growth of the sector.

Overly strict regulation could discourage foreign and domestic investment, jeopardizing the economic viability of numerous mining projects, and despite the presidential transition not yet taking place, there is founded concern in the sector due to the negative statements from the outgoing president and the environmental liaison of the president-elect's campaign, who have shown reluctance to engage in dialog to find alternatives that allow for sustainable and responsible mining development in the country.

Given this scenario, it will be essential for the mining industry to seek open and constant communication with the new government. This communication should focus on submitting proposals and policies that promote legal and administrative stability, thereby attracting investors and workers with the assurance of government support for the safe development of this activity. Collaboration between the private sector and the government will be crucial in finding a balance between environmental protection and the economic development that mining can provide.

Moreover, the mining sector will need to adapt to new political realities and seek innovation in its practices to comply with environmental and social regulations. Adopting cleaner and more efficient technologies, as well as implementing corporate social responsibility programs, could be effective strategies to gain the favor of public opinion and authorities.

The presidential elections in Mexico have outlined a new political landscape that presents both challenges and opportunities for the mining sector. The victory of Claudia Sheinbaum and the legislative majority of her coalition suggest a potential tightening of regulatory policies toward mining. However, the possibility of a favorable ruling from the Supreme Court of Justice of the Nation on the reforms to the Mining Law offers hope for the sector.

It will be fundamental for the mining industry to prepare for constructive dialog with the new government, seeking to promote policies that balance economic development with environmental protection. Only through collaboration and innovation will the mining sector be able to face the challenges ahead and ensure its contribution to Mexico's sustainable development.