January 13, 2025 - Mexican lawmakers are beginning to push for more favorable mining policies, BNamericas reports.
Mexican lawmakers, including those from the ruling Morena party, are increasingly advocating for mining in the country despite unfavorable policies that have prevailed since Andrs Manuel Lpez Obrador took office in 2018.
The policy of freezing concessions and the slowdown in permit processing have continued to hamper the performance of the mining industry during Claudia Sheinbaum's six-year term, which began on October 1.
The May 2023 reforms, which granted the SGM geological service exclusive exploration rights, further complicated private participation and affected the search for minerals.
More recently, the approval of increases in special and extraordinary mining royalty payments, from 7.5% to 8.5% and from 0.5 to 1.0%, respectively, increased the tax burden for mining companies in the country, affecting investment prospects.
"It will be analyzed because there has to be a balance and it is also a large part of the GDP and especially of the economy, it generates a lot of income," said Morena member Sal Monreal to the newspaper Reforma regarding the increases in the payment of royalties.
The Camimex mining chamber warned that the measure approved as part of the 2025 budget would threaten more than $6.9 billion in investments in new projects over the next two years.
The chamber also said that, with a total tax burden of 52.7%, the new increase would aggravate the lack of incentives for exploration, which has fallen by 50% since the 2014 tax reform. It anticipates that local mining investments will fall from about $5 billion in 2024 to $3.8 billion in 2025.
In this regard, Erubiel Lorenzo Alonso, a legislator from the opposition PRI party, blamed Morena for the fall of the industry.
"I believe that there is a major recession for the mining industry due to the lack of beneficial tax incentives that the Morena government has not been able to promote, and that generates a significant setback; at the end of the day it is unemployment," he said, as quoted by Reforma.
Senator Mario Vzquez, of the PAN, told local media that legislation should also focus on providing certainty to investment.
“All exploration options for mining concessions have been administratively cancelled. Mining investment has been declining in recent years due to a closed mindset, let's say, regarding private investment in it, which is necessary to take advantage of the resources that the Mexican subsoil has,” said Vzquez.
Regarding the proposal to ban open-pit mining, which Sheinbaum promised to review, Monreal said that he is in contact with Camimex and mining investors, who have expressed their desire to regulate it rather than make it illegal.
“Not to ban it 100%, but to mix it or vote on it, if necessary, on a case-by-case basis,” said Monreal.
Vzquez, for his part, agreed with this proposal, although he stressed the need to make the environmental requirements for its approval more rigorous due to the damage it could cause.
Camimex warned that this ban would destroy a strategic sector for the economy and threaten more than $3.9 billion dollars in investments and more than $40 billion pesos ($1.93 billion dollars) in tax revenues.