Mexico’s plan for a ban on open pit mining was not included in a list of 100 pledges outlined by incoming President Claudia Sheinbaum on Oct. 1, the day of her inauguration.
Sheinbaum signaled in her campaign that she supported the policies of her predecessor, President Andrés Manuel López Obrador — also known by his initials AMLO — who took a hard line on the mining sector, including pushing for a ban in Mexico’s legislature. Both are members of the Morena party, which dominates the country’s Congress.
While analysts said they still expect Sheinbaum to hew closely to AMLO’s policies, the new president may take a different approach on certain issues, including her predecessor’s proposal to ban open pit mining. A ban would affect future mining operations, and the possibility has caused concern among the country’s copper and gold miners. Mexico is a major global producer of both metals.
The absence of the ban among Sheinbaum’s pledges is good news for the country’s mining sector, analysts told S&P Global Commodity Insights.
“I’m not sure that she’s willing to fight that fight right now,” said José Sevilla-Macip, a senior research analyst at S&P Global Market Intelligence who focuses on economic and country risk in Latin America and the Caribbean.
Political choices
Whether the ban moves forward will in part hinge on the Morena party and whether they make the law a priority, Sevilla-Macip said.
“I don’t see her trying to pass this right away,” Sevilla-Macip said, adding that it would likely be up to Sheinbaum to drive lawmakers to vote on the bill.
If the ban does pass, analysts said they doubted it would be retroactive as this could expose the government to being sued by owners of open pit mines. Analysts said the ban as currently configured would not be absolute as it gives Mexico’s executive branch some wiggle room to undo the ban in cases where the government orders an exception.
“It is a very important caveat in the sense that it basically bans it but allows it if the government wants,” Sevilla-Macip said.
While analysts underscored that Sheinbaum is very much in AMLO’s mold — a supporter of leftist policies — they noted that the new president is more technocrat than populist and may be more open to dialogue over some issues.
“She has been reassuring to international investors, and she’s very much in favor of the energy transition metals,” Coleman said.
Sheinbaum flagged Mexico’s lithium and copper sectors as priorities in her inauguration speech.
Peter Megaw, a veteran of Mexico’s exploration industry and the former chief exploration officer of MAG Silver Corp., said he doubted that Sheinbaum would quickly make her policies on mining clear.
“There are many more pressing problems,” Megaw said, citing “nightmare” issues with drug cartels among other things. “Pretty much everyone I talk to on the Mexican side says it’ll be six to nine months before we have a good idea which way she will move. The biggest question now is how far and how fast she distances herself from AMLO, including if she does.”
Source: S&P Global
