Seven Future Challenges for the Mexican Mining Sector to Overcome

The mining sector in Mexico continues to face challenges, as the Mexican Mining Chamber (CAMIMEX) identified at least seven hurdles the sector must overcome to continue its growth and expand the investment it attracts.

Civil society, the government and the mining industry are aware of the need to work together toward the growth of Mexico, and the sector is committed to the complete development of the industry’s potential, for which it needs regulatory and financial certainty in turn. Mining companies have committed to the UN Sustainable Development Goals (SDG), considering three basic elements to follow: economic growth, social inclusion and the protection of the SDGs. 

The first challenge identified by CAMIMEX is to strengthen the role of the mining sector as a strategic ally of the federal, local and state governments for economic reactivation and the social well-being of the country. 

Secondly, the industry must encourage the delivery of concessions to boost the exploration and development of new projects. The exploration stage is one of the most important phases in the industry and represents the starting point for the sustainable exploitation of mineral resources. 

Thirdly, the industry must request new tax incentives to enhance its competitiveness. It will be necessary to propose an immediate deduction of preoperative exploration expenses and tax stability agreements to the authorities. According to a recent study by PwC, the mining industry in Mexico has a tax charge of up to 52.68 percent, more than in other jurisdictions like Ontario, with 34,61 percent, Chile, with 35.66 percent, Arizona, with 30.17 percent and Peru, with 39.93 percent.

The fourth challenge is to boost a legal framework that guarantees certainty for the mining operations via state tax initiatives, the creation of an Indigenous Consultation Law and certainty regarding reforms.

Moreover, Mexico’s mining companies must create a joint task force with the Ministry of Economy and the main mining states to strengthen communication channels with the authorities and work together to implement public policies for the benefit of the country and mining communities, as well as incentivize a responsible mining industry. It is expected to establish a group with the governors of the five main mining states in Mexico headed by the Ministry of Economy. 

To relay the realities of the mining industry, mining players should also continue to promote the sector as essential for the growth of the country, especially for the wealth it brings to remote communities. 

Finally, the mining sector will have to continue working on the implementation of better social and environmental practices, investing the necessary resources to strengthen sustainability policies. Recently, aiming to promote these practices, the Minister of Economy signed an agreement with the UN to monitor, identify and evaluate the sustainability actions taken by mining companies.

Despite these challenges, MBN recently reported that major projects for gold and silver exploitation will continue to be developed in the country.