Volume 44, Number 172,
January-March 2013
Mining as a Development Factor in The Sierra Juárez in Oaxaca:
an Ethical Evaluation
Mario Enrique Fuente and David Barkin
MINING AS A DEVELOPMENT FACTOR IN MEXICO

Mexico one of the most important reserves of non-petroleum mineral products in the world. It is among the top 12 countries in level of extraction for 18 key metals and minerals with high international demand (Presidency of the Republic, 2007). The state of Oaxaca is recognized for its contribution of silver, copper, iron, crystal graphite, coal, gypsum and travertine, and has high potential for gold, zinc, antimony, mica, zeolite, marble and granite (geo, 2011: 176). An indicator of the relevance of the mining industry, which the Mexican government likes to advertise, is the fact that in 2009, growth in the production value of these elements was more than 25% (sgm, 2010: 6). In general terms, the total value of production was 119.6 billion pesos and their main products were gold (18.1%), silver (14.5%), copper (13.1%), sand (7.4%), zinc (7.2%), gravel (5.4%) and iron (4.9%), which together represented 71.1% of the value (SGM, 2010). From 2007 to 2011, gold extraction —mainly by Canadian companies— doubled, going from 43.7 to 87 tons and reaching 25% of total extraction (Rodríguez, 2012).

With growing international demand for minerals, the potential for national wealth motivated the government to promote a mining development policy based on an economic model of “comparative advantages.” Their success has been evident in the high amounts of foreign investment,3 metal extraction (mainly gold and silver), incomes and employment. This sector (classified as petroleum and mining) holds the first places among currency generators. These features —so exalted in recent years— have created high expectations that are used to justify fostering this type of activity as one of the great pillars of the country’s development.

The spike in the mining sector over the past three decades has occurred in many parts of the hemisphere. This process is linked to various factors, among which the following stand out: the price and demand that these metals have acquired in the international market, cost reduction as a result of technological development in the extraction industry, the importance of quality versus quantity, the emergence of new transcendental metals for the automotive, military and computer science industries, the freeing up of financial resources in the Toronto stock market, and above all, the Mexican government’s implementation of policies to open the country to foreign investment (Delgado, 2010; Garibay, 2010; Garibay and Balzaretti, 2009).

In the framework of adjustment policies and structural changes undertaken during the administration of Carlos Salinas de Gortari (1988-1994), the rules governing the relationship between the mining industry, the State and the national project underwent significant changes. Among the most important actions were the reforms made to Article 27 of the Constitution in 1992 (regarding land ownership and the management of underground resources), the Foreign Investment Law in 1993 and the Mining Law. These reforms were a strong stimulus for foreign direct investment as a strategy to foster mining activities. They separated land ownership from granting concessions, allowed foreign capital to hold 100% of shares, gave a key fiscal stimulus by granting a low preferential tax rate defined by the material in the mine, exempted those in the industry from paying taxes for exploration and machinery imports, classified contributions from companies under the topic of social help to count as part of their tax declarations and exempted them from oversight in the exploitation report (Delgado, 2010; López and Eslava, 2011).

The following governmental administrations have continued modifying regulations to favor foreign investment. One example was when the Official Newspaper of the Federation published a regulation on April 28, 2005 that simplified the process for the allocation of mining concessions. During Calderón’s administration, more than 51 million hectares of land have been granted to the private mining sector (Senate of the Republic, 2011). In the state of Oaxaca, 779 thousand hectares have been granted, that is, more than 8% of the land surface in the state ((geo, 2011: 177).

Federal and state development plans recognize that these activities are complex, but due to their economic value, sociocultural and environmental factors have been subordinated to profitability. The State Plan ((geo, 2011), for example, mentions a willingness to respect Article 19 of the United Nations Declaration on the Rights of Indigenous Peoples (p. 104), while at the same time explicitly recognizes that concessions have been granted without the consent of indigenous communities (p. 177). However, they wipe the slate clean in their diagnosis, indicating the following:

Mining activity in the state is immersed in a political and social scenario that inhibits its proper development given the high potential for resources. A variety of national and international companies have decided to invest in mineral exploration and exploitation and have faced problems regarding territorial organization, a low educational level among community inhabitants, a lack of highway infrastructure and obsolete public policies and legislation (geo, 2011: 177).

Based on this evaluation, it seems that the only objective of the official policy is to turn mining into a strategic sector for economic development for the state, independent (of distribution) of the costs, as has occurred at the national level.

It should be highlighted that countries such as Bolivia, Ecuador and Venezuela, which are in the process of building alternative development projects, also have economies that are playing their assigned roles in the international division of labor, and as part of a (neo)colonial geopolitical strategy for the extraction and transfer of minerals (Delgado, 2010).

3 In 2010 and 2011, Mexico was in fourth place worldwide and first place in Latin America in terms of attracting capital destined for mining exploration (Rodríguez, 2012).

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 192, January-March is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
CP 04510, México, D.F. Tel (52 55) 56 23 01 05 and (52 55) 56 24 23 39, fax (52 55) 56 23 00 97, www.probdes.iiec.unam.mx, revprode@unam.mx. Journal Editor: Alicia Girón González. Reservation of rights to exclusive use of the title: 04-2012-070613560300-203, ISSN: pending. Person responsible for the latest update of this issue: Minerva García, Circuito Maestro Mario de la Cueva s/n, Ciudad Universitaria, Coyoacán, CP 04510, México D.F., latest update: Feb 23th, 2018.
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