The Peña Colorada mining complex, a 50-50 joint venture between Luxembourg-based steelmakers ArcelorMittal and Ternium, warned of the risk of a loss of around 5,000 direct and indirect jobs if the Mexican Congress approves President Andrés Manuel López Obrador's bill to ban open-pit mining.
“In our state, Colima, just with the effect on Peña Colorada, there is a serious risk of losing 1,340 direct jobs and 3,500 indirect jobs,” the company reported in a post on its social media account.
Colima, the home of Peña Colorada, is the second smallest economy in the country with a contribution of 0.6 percent to the national GDP ($1.96 trillion), according to Mexico's National Accounting System, reviewed by SteelOrbis.
According to Peña Colorada, with the ban, Colima would lose an annual economic spillover of $125 million. This would affect more than 30 thousand people who live in the cities of Minatitlán and Manzanillo in the state of Colima, and Cuautitlán de García Barragán in Jalisco.
In addition, around $50 million in tax contributions that the company makes to the Mexican treasury would not be collected.
Peña Colorada's warning comes a couple of weeks after the Mexican Mining Chamber (Camimex), which gathers together the main companies in the country's mining-metallurgical industry, warned of the negative impact on the Mexican economy if Congress prohibits open-pit mining, which generates 60 percent of the value of production.
Recently, the Constitutional Points Commission of the Chamber of Deputies approved the Constitutional Reform Initiative of the President of the Republic, Andrés Manuel López Obrador, to prohibit open-pit mining.
With this first step, the bill will be like other proposals by the President of the Republic, approved by the Chamber of Deputies and the Senate. With its approval and entry into force, said Camimex, more than one million formal jobs will be lost, and it will impact the development of more than 690 mining communities in rural areas.
The national coffers will also be affected with the loss equivalent to $1.63 billion in tax contributions, and it will also cause the Mexican economy to contract by 1.0 percent of the national GDP.
Peña Colorada, like Camimex, said they are willing to engage in a constructive dialogue with congressmen and all interested parties to find solutions that contribute to a balanced environmental, social and economic development.