In 2022, Torex Gold will invest US$800 million to raise its productivity and improve the infrastructure of the municipalities of northern Guerrero. However, the electricity reform represents a risk for other of its investments, leading the company to put them on hold until the reform’s future is cleared.
Jody Kuzenko, President of Torex Gold, said that the company feels safe with the new government of Evelyn Salgado, which is why it will allocate a greater investment in 2022, especially to improve the quality of life of its communities. "Mining improves people's lives in a positive way, because it manages to give prosperity to many people, social development in communities, secure jobs, local purchases and above all to work in a responsible way with the environment."
Torex Gold recently announced that it will build a US$5 million plant at its Morelos property, which includes the El Limón Guajes mine and the Media Luna project. The new plant is expected to reduce Scope 2 greenhouse gas emissions by up to 8.6 percent using 2019 as the baseline year. On the other hand, Kuzenko recently explained that due to the uncertainty caused by the electricity reform, the company’s solar project is on hold. “We are seeking permits and there are active discussions with the government about when (the solar plant) will be allowed. In addition, the next steps of the project will be taken when we know what will happen with the reform."
The reform seeks to grant CFE a guaranteed market share of 56 percent in electricity generation, forcing all sectors to buy energy from CFE generated from a fossil fuel power plant. Karen Flores, Director of CAMIMEX, explained that the cancellation of permits proposed in the reform would prevent the sector from having access to clean energy sources. Currently, the sector obtains 34 percent of its energy from clean sources. Following the reform, there is a risk of not only slowing the progress of the sector but of having a setback in the clean energy transition.
The Ministry of Energy (SENER) has responded that with the implementation of the reform, the country will not regress in terms of sustainability and in fact it will achieve its clean energy goals set at 35 percent capacity by 2024, considering that 32 percent is already in place, reported MBN.
Despite the government's attempts to give certainty, uncertainty has increased, leading to a drop in investment, especially since López Obrador announced that previous contracts could be canceled. Kuzenko said that uncertainty is the enemy of investment. Mexico needs a higher level of certainty at the federal level, including economic, security, permitting and energy policies, if it wants to take advantage of the sector’s opportunities.