Mexico's legal framework for mining at a crossroads

With less than three months before Mexico's government hands over power to president-elect Claudia Sheinbaum's administration, the legal framework for mining is still eroding certainty and threatening potential investments, although the new government may try to rectify some of the problems.

During President Andrés Manuel López Obrador's administration, which started in 2018, the mining law was reformed twice and other related legislation was amended last year. A reform made in May 2023 still lacks the corresponding regulations, even though, by law, they should have been published no later than last November.

Mariano Calderón, a mining expert at law firm Santamarina + Steta, said that mining legislation is at a three-way crossroads, but the direction it takes will become clearer only after president-elect Claudia Sheinbaum takes office on October 1.

“The first path is, of course, that the questions about the constitutionality of the [2023] mining reform have to be resolved. There is an unconstitutionality action that the supreme court will resolve at some point,” Calderón told BNamericas.

“There are a series of amparo [injunction] lawsuits that were filed by individuals, citizens or private entities, against the mining law, and each of these lawsuits must be resolved,” he added, saying that the legislation effectively suffers from defects in terms of its constitutionality.

Therefore, Calderón does not rule out that there may soon be a ruling from the judicial branch declaring the mining reform unconstitutional.

The second path Calderón sees is that the regulations or secondary legislation of last year's reform will finally be issued. However, in this scenario, it will be essential to analyze not only their content but also which authorities will be in charge of key entities for the advancement of mining projects.

Calderón recalled that during López Obrador's entire term, practically no new mining concessions have been approved, while delays have been common in processing key permits, especially environmental ones.

“These regulations can be issued at any time, either by the current president… or by the new president as soon as she takes office. If it's a decision and it's a regulation that the new president issues, it may be in the short term after she takes office,” said the lawyer.

"But we will have to see who will be the undersecretaries at the economy ministry, who remains as head of mining or at the mining department, to name those who would put the finer points into the regulation that can be issued at any time," he added.

The third path described by Calderón is the latent possibility that the new government will make a new proposal to reform the mining law after taking office and addressing the problems of the current one.

“Or it may even propose and present to congress a new mining law to achieve a consensus, to reach an understanding from scratch of a completely new order that regulates the activity in the country, and which would have to go through a legislative process,” Calderón said, highlighting that this initiative could be started by the presidency or the majority faction in congress.

“So, I think that these three scenarios or those three paths can even run in parallel and we would begin to see a little more light and clarity as the new administration takes office,” said Calderón.