New mining reform will tackle abuse but wont affect current mining companies operating in Mexico: AMLO

Today, president of Mexico Lopez Obrador announced that current mining companies in Mexico won’t be affected with the upcoming mining reform.

AMLO explained the reform aims at tackling corruption, environmental protection and abuse. He explains that previous administrations gave away 60% of the Mexican territory to foreign mining companies but exempted them from paying taxes.

A previous structural reform led by the first president of Mexico who installed the new economic model called neoliberalism, President Salinas de Gortari, reformed the mining laws to remove taxes for mining extractions.

Current president of Mexico, Lopez Obrador (AMLO), says tax exemptions were reinstated six years ago (before he was in office), yet mining companies in Mexico currently pay very low taxes compared to Canada or other countries.

AMLO also highlights how mining companies respect Canadian environmental regulations, whereas the same mining companies in Mexico, the majority Canadian, “do not care about the environment in Mexican soil”, AMLO said.

As an example, AMLO recalled the 2014 environmental disaster in the town of Cananea where the world’s largest open-pit copper mine company has been operating for more than a century, –a company that has changed ownership many times throughout–, contaminated the Sonora river and the San Pedro (a tributary of the Colorado River), with arsenic and heavy metals. The river remains contaminated to this day.

Photo: International space station (Cananea copper mine).

“On 6 August 2014, a tailing pond breached, releasing 40,000 m3 of copper sulphate into a tributary of the Sonora River. The spill polluted Arroyo Las Tinajas (17.6 km), the Bacanuchi River (64 km) and the main stream of the Sonora River (190 km). These streams cross over seven municipalities inhabited by 20,048 people. The pollution led the government to close 322 wells, leaving local communities without water for domestic and farming uses.” WSN.

The new mining reform aims at tackling corrupt concessions (land leases) with a duration of a thousand years, wherein many of those are use just for pure market speculation or to harm the environment.

“During the last 30 years, Mexico gave away 120 million hectares of land to foreign mining. That’s 60% of Mexican territory.” (292 million acres)

AMLO once again blamed the previous economic model which he calls “36 years of neoliberalism, a model of privatization and corruption”. He compares the former mining structural reform with the energy reform of 2014– a reform that passed under a very public corruption scandal.

In 2015 Mexican senators and legislators from the PAN party accepted bribes in bags of cash. The scandal was linked to the Brazilian energy company Odebrecht. The Odebrecht case is one of the largest corruption cases documented in recent Latin American history, and under investigation in the U.S.

“The previous government [in 2014] gave 110 land-lease contracts to private companies, that’s 20% of all Mexican oil extraction. The majority of those concessions were used not to extract oil but for pure market speculation.”

The president explains how these types of structural reforms were created so companies, mostly foreign, could enter the Mexican market. In the case of oil extraction, corporations who asked for these land-leases promised to extract 3 million barrels a day, yet 95% of those did not extract any oil but simply re-sold those leases to others. AMLO uses as an example of how British companies sold the Mexican oil land-leases (concessions) to China.

“The new mining bill will correct this type of corruption and abuse as well as protecting contamination of the water,” said AMLO.

The reform will ban issuing new mining land leases for the use of pure speculation. Also, AMLO clarified that current mining land leases will be respected and nothing will affect the mining companies currently operating in Mexico.

Sources:

https://en.m.wikipedia.org/wiki/Buenavista_mine

AMLO Press Conference April 13, 2023