Mexico’s president proposes ban on open pit mining, says it ‘transgresses human rights’

Mexican President Andrés Manuel López Obrador, known as AMLO, has proposed a series of constitutional reforms, including a ban on open-pit mining.

Speaking before parliament, López Obrador argued that open-pit mining causes severe environmental damage and uses excessive water that could be supplied to water-scarce communities. 

“It is clear that open-pit mining transgresses human rights by affecting the right to a healthy environment and good health,” his proposal states. “The most significant effects are evident in the communities and towns near project areas, placing them in a situation of vulnerability and inequality.”

The proposal does not mention underground mining. 

The motion is expected to revive hostilities between the Mexican government and big industry players, as the country’s oldest and largest mines are open-pit operations. In total, Mexico hosts 264 mines that extract surface minerals, most of them located in Chihuahua, Zacatecas, Sonora and San Luis Potosí. 

Top producers such as Grupo Mexico’s Buenavista del Cobre, Newmont’s (TSX: NGT; NYSE: NEM) Peñasquito, two of Fresnillo’s (LSE: FRES) gold-silver units, and several other mines owned by Industrias Peñoles are open-pit operations.

Since taking over in 2018, the AMLO administration has not granted any new concessions through de facto mechanisms but without the backing of any specific law. 

The recent move adds to the uncertain investment atmosphere in the country, whose miners were shaken back in May 2023, when Mexican Senators approved a new mining law in an accelerated process without opposition legislators present. 

The mining law reforms involve companies having to deal with an increased burden of pre-consultation, impact studies and water concessions, among other things. The new law also requires financial commitments (bonding) and shortens the tenure of mining concessions from 50 years to 30 years, with a one-time 15-year renewal possible.