By: Santiago Suárez Sevilla, Carlos Suárez de Miguel and Alejandro Preciat Campos.
On February 5, President Andrés Manuel López Obrador presented to the Congress of the Union various initiatives where various provisions are added and reformed to the Political Constitution of the United Mexican States. Among these initiatives, a total ban on open pit mining is proposed.
This practice, defined as The extraction of mineral resources from the surface of the ground and not underground has been the subject of continuous scrutiny by the environmental policy of the current government. Measures have been implemented such as temporary suspension of the granting of concessions for this type of mining, based on its potential to cause negative impacts on the environment and the health of surrounding communities.
Consequently, multiple actors in the mining industry have stated that the practice of open pit mining in Mexico meets environmental sustainability standards. Likewise, they have stated that the implementation of said legislative initiative could entail serious economic repercussions for the country, considering that open pit mining constitutes approximately 60% of the country's total mining production.
In this article, the legal considerations of the proposed ban will be analyzed, looking at the legislation of other jurisdictions that have regulated and/or prohibited open pit mining. Likewise, the current legislative and electoral context of the country will be briefly examined to evaluate the political viability of the initiative, in order to answer some of the questions that have generated uncertainty in the mining sector.
Analysis and Scope of the Initiative: Details and Consequences
To understand the effects of the proposal, it is imperative to analyze the constitutional text that is intended to be modified. Below is a summary of the relevant amendments proposed by the Executive to the constitutional text:
| Current text of article 27 of the CPEUM | Proposed text for article 27 of the CPEUM |
| In the current wording of the sixth paragraph, prohibitions are exclusively established for the concession in the following areas: - Radioactive minerals; - Control of the national electrical system; and, - Public services of transmission and distribution of electrical energy. | They are additionally proposed the following restrictions on the granting of concessions and contracts: - In terms of water, if it is about areas with low availability of water in quantity and quality; – - In mining matters, for the exploration, exploitation, benefit, use or exploitation of minerals, metals or metalloids in open pit mining; and - In terms of hydrocarbon extraction, those in unconventional oil fields through fracking or hydraulic fracturing. In addition, a sanction is introduced in the eighth paragraph for those who carry out any of the activities described in points two and three mentioned above. For more details about the proposed reform of constitutional article 27, it can be consulted through the following link. |
The content described in point two of the proposed text for Constitutional article 27 eliminates the power to grant concessions to individuals to carry out this activity, however, it does not imply in strictu sensu a widespread ban on open pit mining.
This measure could be interpreted as a prohibition de facto into practice, which would place Mexico among the small group of nations that have enshrined in their legislation the total restriction of open pit mining. On the American continent, for example, the Central American countries of Costa Rica1, El Salvador2 and Honduras3 have adopted similar regulations and proposals. However, the particularities and economic context of the Mexican mining industry differ significantly from these precedents.
Dado que aún no se ha materializado en un marco normativo vigente, carecemos de datos sobre los posibles efectos jurídicos de la prohibición hondureña. En el caso de Costa Rica y El Salvador, la escasez relativa de depósitos minerales ha llevado a los gobiernos de estas naciones a priorizar la protección otras fuentes económicas, tales como el ecoturismo, la agricultura o la minería artesanal por encima del capital de inversión para la minería a gran escala. Es decir, estos países no se enfrentaron a pérdidas significativas debido a la orientación previa de su economía, la cual esta significativamente distanciada del sector minero.
En contraste, ciertos países cuya sectorización económica se basa significativamente en la extracción de minerales han implementado medidas notablemente diferentes a las adoptadas por las naciones americanas mencionadas. Un claro ejemplo es el de la Unión Europea, que tras emitir una resolución a través del Parlamento Europeo en 2010, solicitando a los Estados miembros la prohibición generalizada al uso de tecnologías mineras a base de cianuro4 -one of the techniques used for open pit mining-, has adjusted its policy amid recent debates about the region's energy self-sufficiency, adopting the European Regulation on Fundamental Raw Materials in March 2024.
This regulation, in contrast to the Central American one and the one proposed by the current president of Mexico, proposes a reduction in the administrative burden and a simplification of the procedures for granting concessions and permits for the extraction of fundamental classified raw materials, without imposing restrictions on other modalities. . of open pit extraction, beyond those established in the text approved by the European Parliament. In addition, it seeks to promote practices that encourage the development of practices that allow the economic growth of the mining industry to be reconciled with environmental protection.
This perspective of openness has not been limited to the European continent. In the Canadian province of Alberta, an application was submitted to operate an open-pit coal mine in the Rocky Mountains. That application was initially rejected in 2021, but following a review by the Alberta Environmental Regulator in February of this year, it was determined to be exempt from a ministerial prohibition order. Therefore, the granting of the concession will be subject to a public hearing.
We can also observe similar situations of measured liberalization in middle or lower middle income countries. Such is the case of Philippines, a country that in 2021 repealed an administrative ban on open pit mining, in force for four years. As in the European Union, this decision was made in order to reactivate an industry that was considered stagnant after a period of restrictive policies. This objective was consolidated after metal production increased by 32% in the year immediately following the revocation of the prohibitionist policy.
Importantly, in both the Philippines and the European Union, a common approach has been observed among those advocating renewed openness in open pit mining: the implementation of a rigorous regulatory regime based on environmental regulations and permitting procedures. . This approach is aimed at mitigating its impacts on adjacent areas, including aspects such as water quality, atmospheric pollution and habitat degradation. An example of this approach is the case of the states of Maryland5 or Missouri6, in the United States, where historically it has chosen to regulate open pit mining, rather than impose a general ban.
This comparison raises the following question: Does Mexico have a more defined economic orientation towards measures similar to Central American prohibitionism or the measured opening observed in the regulations of Europe and the Philippines? To begin to answer this question, it is necessary to take into account that in the country mining currently represents the 8.6% of industrial gross domestic product, employing more than 190,000 people according to 2019 data.
These figures have led mining sector participants to conclude that the economic balance in the country is not tilting towards prohibition. This perspective has increased fear of the possible negative economic impacts that the initiative could have if approved. Therefore, industry participants advocate a regularization approach without falling into prohibitionist tendencies.
However, it is important to mention that this debate cannot begin without first considering the political context of the country. This is because the proposed reform could in itself be unviable.
The political future of the reform
The set of constitutional reforms proposed by the President demands a qualified majority of two thirds in each of the chambers of the Congress of the Union, in addition to a plurality of the local congresses of the States. Looking at the composition of the current legislature we can see that the government's parliamentary group led by the Movimiento de Regeneración Nacional (MORENA) party does not currently have enough votes to achieve this majority during the short time remaining of President Lopez Obrador's six-year term. However, the results of the electoral process held on June 2 of this year suggest that this situation will change. The electoral process carried out on June 2 of this year granted the new government headed by Dr. Claudia Sheinbaum Pardo and the coalition “Sigamos Haciendo Historia” formed by Movimiento de Regeneración Nacional (MORENA), the Partido del Trabajo and the Partido Verde Ecologista a broad majority that makes it possible to open up to constitutional reforms. This has created some uncertainty as to which of President Lopéz Obrador's agenda could be chosen as a priority by the incoming government.
Although the conversation is currently focused on the proposal for judicial reform, a discussion that has overshadowed the debate on the rest of the proposals, the legislative alliance led by MORENA has promised to give continuity to the current president's projects, including those related to mining, stating in its work plan that: “No more open-pit mining concessions will be granted. Those that have concessions will be evaluated as long as there is recognition from the population and they do not have environmental impacts.” Additionally, the Constitutional Points Commission of the last legislature approved just last August 14 the ruling which includes the prohibition of open-pit mining, which shows a still latent political interest in the aforementioned reform.
However, this reform still has a long way to go and may still suffer alterations that may lessen its effect. Within the same commission, for example, a reservation was introduced and approved that would allow the practice “in those cases exceptionally determined by the Federal Executive... due to its strategic nature for national development”. This has not gone unnoticed by the sector, being that during his participation in the Mexico Mining Forum 2024 the president of the Mining Chamber of Mexico (Camimex), Pedro Rivero stated that he saw “openness from the authorities to seek common ground, and in legislators to listen.”
In this environment, at Servicios Legales Mineros we will remain abreast of developments in this matter for the sector, and as such, we are at your disposal to carry out a detailed analysis of the possible implications and impacts, as well as to provide advice in the promotion of legal actions relevant to the specific case, in the scenario that the constitutional reform is approved.
- See: the “Law to Declare Costa Rica a Country Free of Open Pit Metal Mining” of 2010 by which, among others, article 8 BIS of the Mining Code was reformed, which now establishes: “Permits or concessions will not be granted for open-pit metal mining exploration and exploitation activities in the national territory.” ↩︎
- See: the Decree No. 639 of the Legislative Assembly of the Republic of Salvador by which the “Metallic Mining Prohibition Law” is issued. ↩︎
- The proposed ban in Honduras was presented by the government of President Xiomara Castro, who declared the country “free of open pit mining” in January 2022 and announced a plan to gradually end concessions in the matter. This official communication has not yet materialized into legislation.
↩︎ - See: The European Parliament Resolution of 5 May 2010 on the general ban on the use of cyanide-based mining technologies in the European Union P7_TA(2010)0145 ↩︎
- See: Maryland State Statutes: Environment, section 15-505, which specifically regulates and regulates the practice of open pit mining. ↩︎
- See: Missouri State Statutes, Title XXIX, Section 444.770, which establishes the existence of a specific permit for open pit mining. ↩︎
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