Mexico’s mining industry is stuck in neutral. Despite its potential, the sector is struggling to gain traction due to current policies. The industry is a key player in the country’s economy, supplying over 70 industries, including automotive, energy, pharmaceuticals, and construction. The recent shift towards clean energy has further increased the demand for minerals like copper and lithium.
The Current State of Mexico’s Mining Industry
The industry is facing significant challenges. The previous government’s decision to halt new mining concessions and revoke existing ones has left the sector in limbo. According to the Mexican Mining Chamber (Camimex), 51% of mining projects are on hold, with around 391 projects stalled. Many concessions were granted to companies lacking the technical expertise to exploit them, while others were abandoned due to failed projects. For example, a lithium project that has been searching for success for years without finding it.
The cancellation of new concessions and the revocation of existing ones have created uncertainty in the industry. The initial intention was to prevent foreign companies from exploiting Mexico’s resources and to protect the country’s territory. However, this decision has had the opposite effect, stifling the mining industry. Some of the affected projects include the cancellation of nine lithium concessions to Chinese company Ganfeng Lithium and the revocation of permits for US-based Vulcan Materials in Quintana Roo due to its designation as a protected area.
In 2023, a reform was passed that reduced the duration of mining concessions from 50 to 30 years, eliminated direct allocation, and established a competitive bidding system. While aimed at protecting the industry from foreign hands, this move has not led to a surge in domestic investment. Furthermore, the budget for the Mexican Geological Survey (SGM) was cut by 9.2% in 2025, limiting the agency’s ability to explore new deposits.
Key Challenges Facing the Industry
The main challenges facing Mexico’s mining industry are:
- Uncertainty due to the lack of new concessions and the revocation of existing ones
- Lack of domestic investment to replace foreign companies
- Reduced budget for the Mexican Geological Survey
- Need for a balanced approach to protect the environment and labor rights while promoting sustainable and competitive mining practices
The mining industry generated $19.638 billion in revenue in 2023, making it one of the country’s main sources of foreign exchange. However, the current paralysis of the industry could have significant economic costs.
A Glimmer of Hope
The new administration, led by President Sheinbaum, has shown a willingness to revisit the ban on open-pit mining, recognizing its importance for industries like cement and lithium production. This move has sparked hope that the industry might be revitalized. After a conflict with a gold mine owned by a US company, the Mexican government appears to be open to dialogue and reconsidering its stance. The challenge now is to find a balance between protecting the environment and labor rights while promoting sustainable and competitive mining practices. Without a clear plan to reactivate the industry, Mexico’s mining sector will likely remain stuck in neutral.
