Remove the ‘Public Utility’ Designation for Mining Industry

In the view of this author, the mining industry is the “Mother of all Industries,” as it provides directly or indirectly elements that are required for each and every industry to be able to work or provide their respective services.

On the other hand, it is also very well-known that given a total lack of communication of all of the benefits the modern mining industry provides to Mexico, there are many prejudices that have led  most people not involved with the industry to have a complete misconception of the sector.

Just as the Political Constitution of the Mexican United States (CPEUM) acknowledges that Mexico is formed by a huge diversity of people, communities, ecosystems, necessities, and requirements, the circumstances of the industry could be easily solved on a case by case basis.

Mexico continues to face contradictions in considering mining public utility industry (it was even designated an essential service during the COVID pandemic). On the other hand, there are plans to change our CPEUM; and the government is also considering discussions to prohibit open pit mines.

It is the author’s opinion that just as in any other industry, the federal government could remove the designation of “public utility” and allow the federal entities (states) to individually decide whether or not mining will be permitted in their states(considering their respective communities, economic situation, and activities performed).

Just as the fishing industry is not relevant to states that are not by the sea, we may find many states in the north of Mexico for which the mining industry is of utmost importance for their development and economic situation.

Of course,  each state that allows mining would have the same authority that the federation now has,  while states that do not rely on the mining industry could freely decide what to do with respect to the industry.

Under this scheme, states that allow mining would, of course, observe all required regulations, but could also directly receive the mining tax on production and use it for the purposes for which the tax was originally created:

• Better education

• Develop a better health system

• Improve communications

• Correctly follow up environmental obligations for respective communities and also share any other benefit with members of the municipalities where the mining activity is taking place.

States could carry out Indigenous consultations, which must be in good faith, free and correctly informed in terms of international conventions and their respective constitutions.

While it is clear that for many years it has been understood that minerals in the ground are the property of the nation, if the new administration is planning to simply shut down open pit mines and not to grant new mining concessions, perhaps the amendment could also include the elimination of the public utility designation at the federal Level, and transfer same to each state of Mexico.

This would be a very important step in order to grant certainty to small, medium and foreign investors, allowing them to continue with mining activities, which are of utmost importance in any country.

Some adjustments to federal laws would have to be implemented, but not all states have the same conditions and not all of them must be forbidden from allowing activities that are important for their economy.