Puebla’s Mining Concessions in Decline
Over the past two years, mining concessions granted in the state of Puebla have dropped from 326 registered at the Ministry of Economy in 2019 to only 310 in 2021, according to the Institute of Management, Administration and Municipal Liaison. This represents a 25 percent decrease in surface granted to mining companies.
In addition, only 229 of the 310 concessions remain valid after 2021. Still, Puebla ranks 17th among Mexican states with the most concessions that will be valid after 2050, with 212 to remain active. A key example is the concession granted in Tulcingo to Santino Construction and Associates, which has a surface of around 29,000ha valid until 2064.
The states with the highest number of concessions are Sonora, Chihuahua, Durango, Coahuila and Zacatecas. Sonora has 2,317 concessions, Chihuahua 1,700, Durango 1,667, Coahuila 1,164 and Zacatecas boasts 1,150. In contrast, the federal entities with greatest decrease in concessions granted were Tlaxcala, Chiapas, Nuevo Leon, Veracruz and Coahuila.
Indigenous communities often take up the fight to stop mining activities on their lands. Recently, Mexico’s Supreme Court rendered two concessions granted to the Canadian company Almaden Minerals invalid, after the Ministry of Economy failed to organize a consultation with the Tecoltemi ejido, which owns land located on the territory. The case sets a significant precedent and highlighted the importance of a sound legal and social approach to gain licenses for mining companies, as well as that of regulatory certainty.
The Tecoltemi issue is key to understanding the importance of establishing good relationships with authorities and communities, as well as carrying out strong due diligence on documentation and land rights. This way, companies can counter uncertainty and thrive in Mexico. Applying for a concession and drafting the related legal procedures may seem to be the first logical steps when deciding on a new investment project. However, local and Indigenous communities play a key role in the success or failure of a project and must be considered, experts agree.
“Companies must investigate the communities where they are planning to invest to know if they are welcoming to these kinds of projects. Mining, if done right, can bring great benefits to communities. However, it can also face rejection as social and environmental conditions are altered,” said Enrique Rodríguez del Bosque, Partner, RB Abogados, at Mexico Mining Forum 2022.
“The legal and administrative framework and provisions regulating the possible affections to the rights of indigenous people and their communities should focus on building a mutual understanding between Indigenous communities and actors both public and private to promote long-term relationships that facilitate the development of projects and investments to overcome the socio-political uncertainty that Mexico has faced throughout the years,” wrote Alberto Caso, Managing Partner, AOSENUMA, for MBN.