MEXICO CITY (Reuters) – The Mexican government’s proposed overhaul of mining laws, including shorter concessions and tighter rules for permits, drew a quick warning from industry leaders who fear it could undermine the sector’s growth prospects.
President Andres Manuel Lopez Obrador offered the draft reform on Tuesday to lawmakers in the lower house of Congress, which would sharply reduce the length of mining concessions to 15 from 50 years.
Mexico, a major mining country for decades, is the world’s top primary silver producer, as well as a top 10 gold and copper miner.
The initiative, which still must pass various legislative steps before it could be enacted, would also add new requirements to obtain mining and water permits, establish a new obligation to disclose mining impacts, and require miners to give back at least 10% of the profits to communities.
The country’s mining chamber Camimex warned that changes contemplated in the draft could provoke “strong repercussions” for the industry, stressing in a statement late on Tuesday that it continued to analyze the proposal.
Since he took office in late 2018, Lopez Obrador has refused to offer any new mining concessions, arguing that too many had been granted by previous governments.
Last year, the president championed the nationalization of the country’s nascent lithium industry, favoring a newly created state-run producer to mine the coveted battery metal, in another move mining sector analysts see dampening investor appetite.
Shares in precious metals miner Industrias Penoles fell more than 3% on Wednesday, after jumping more than 5% the day before, while Compania Minera Autlan dipped nearly 2%.
Leading copper producer Grupo Mexico advanced 0.73%, marking its third consecutive day of gains.
In its statement, Camimex expressed hope the upcoming debate over the proposal will incorporate industry concerns, adding it expects “a broad, inclusive and informed legislative discussion.”
(Reporting by David Alire Garcia, Valentine Hilaire and Noe Torres; Editing by Richard Chang)
