The latest report on the mining of Mexico Mining underlines regulatory investment problems

The Mexican Mining Chamber of Camimex has published its annual report, in which problems with the regulatory framework, a historical decline in foreign direct investments (FDI) and the freezing of the government are highlighted in new concessions.

In a statement, Camimex said that the mining sector invested $ 5.06 billion last year in the country, an increase of 2.1% compared to 2023, but lower than the 5.13 billion USD forecast at the beginning of the year. This year, Camimex projects projects a total investment of $ 5.31 billion.

Investments in 2024 mainly corresponded to the expansion and maintenance of the company, while exploration expenses decreased by $ 438 million. This acceptance “contains the need to strengthen the environment of security for new projects” and “a fact that must be treated as a priority if we want to guarantee the future of the sector,” said Camimex.

The chamber said that it “works with the authorities to create conditions, promote investments in exploration, and recognize that this phase is the key to triggering the responsible benefit of the geological potential in Mexico and the generation of development in the regions. However, there were no details of this work.

In March, Fernando Aboitiz, Head of the Department of Extractive Activities of the Ministry of Economic Affairs, said that the regulatory framework would be clearer by June than the government expected to publish the regulations for the Reformed Mining Act in May 2023. However, no progress has been reported since then.

Two sources that reported the matter near Bnaericas on the condition of the anonymity that the intention is now to reform the mining law again in order to correct questions, although the authorities and the interest groups of the industry have previously promised that the work on the draft of regulations carried out and problems such as geological services of the SGM exclusive calculation for exploring the private participation, clear up.

While the investments rose last year, Camimex also emphasized that the FDI in Metallic Mining declined by 82.8% to USD 364 million, the lowest since the beginning of the records in 2006, as reported by BNAMERICAS in May.

The collapse was banned in the course of the threats of former President Andrés Manuel López Obrador, the open-pit mining, which was tightened by an increase in special and extraordinary fees or license fees that were paid by mining companies in 2024.

President Claudia Sheinbaum stopped the legislation, which brought in the congress at the beginning of her term in October to ban open-pit mining. At the end of June, however, Sheinbaum said that during her term of office, which ends in 2023, no new mining concessions will be granted, which effectively maintains the Freeze López Obrador, which was implemented in 2018.

Freezing in connection with permissible delays has steamed the investment appetite in the industry.

Delayed

In his report, Camimex wrote: “One of the most important problems for the mining sector is the lack of reaction from the environmental authorities in relation to various procedures that endanger the continuity of business in addition to paralysis investments.” The chamber said that it would continue to promote dialogue and working groups with the new authorities of the Ministry of Environment Semarnat and Water Authority Conagua.

The report also found that “116 outstanding procedures for Semarnat and 107 with Conagua were registered, which corresponds to the investment of USD 6.9 billion and the creation of 50,000 new jobs”.

The participation of the mining sector in the economy rose last year and contributed 2.77% to the total GDP and 8.70% to industrial GDP. The sector closed the year with over 416,000 direct jobs and delivered salaries that were 34% higher than the national average and 2.5 million jobs in the value chain.

According to the Department for Mining Development Department, 161 companies in Mexico are abroad. Of these, 76.4% are Canadians and 10.6% from the United States, the rest, among other things, comes from Australia, China, Japan and Chile.