Rubén Cano Founding Partner CR LEGAL PARTNERS MEXICO
Can you help our readers understand the context around the current legal uncertainty in Mexico?
Mining Law allow individuals and corporations to exploit the naturals resources in Mexico, however, in 2021 and in 2023 the mining legal framework was amended, together with a series of recent Constitutional reforms, which have led to the uncertain legal environment that persists today. The new mining law reform was challenged by most mining companies active in Mexico through an Amparo trial (akin to the Habeas Corpus Resource used in common law), and the Supreme Court of Mexico is still pending to determine whether the latest amendments are indeed constitutional or not. How confident are you that the Supreme Court will render an impartial ruling?
During the presidency of AMLO, the entire judiciary was restructured, introducing a direct voting process to select Supreme Court ministers, federal judges and magistrates. Additionally, the requirements for becoming a judge have been lowered, which could potentially affect the independence of the judiciary. This situation raises two concerns: first, judges and magistrates might have political affiliations, rather than being entirely impartial, and second, that the new Supreme Court responsible for adjudicating the challenges to the federal mining law may include members with insufficient experience. What is your advice for foreign companies operating or looking to invest in Mexico?
Investors should be prepared to be compliant in a hyper-regulated environment that is becoming even more regulated. President Sheinbaum is focused on reducing the poverty gap and prioritizing Mexico, so demonstrating a positive societal impact will be key for current and future mining operations. The new federal government recognizes the potential and necessity of a strong private sector, including mining investments.
Alberto M. Vasquez Founder VHG LEGAL SERVICES
How has the investment environment changed in Mexico in recent years?
Mexico is going through a period of total uncertainty with regard to its mining industry. The past administration decided against granting any mining concessions, the government witholding the publishing of freedom of lands so that companies or individuals could not apply for mining rights. Then, the 2023 amendments to the mining law almost killed the industry, with everyone investing or looking to invest in Mexico forced to file an Amparo (an injunction) to protect themselves and the concessions granted to them under previous legislation. During this period, our work at VHG has been dedicated to supporting these companies and explaining to them that no new law can be applied retroactively without violating Constitutional rights, but also that this being stated in the Constitution does not guarantee its application; one must request it via the Amparo process. The concession holders had 30 days to attack the legality of the process followed by the government or explain how the new laws affected their rights. We have therefore seen a large number of Amparos calling for the annulment of the 2023 legal amendments. What is the main risk faced by companies currently operating in Mexico?
Under the 2023 amendments, all current exploration in Mexico is banned. Nevertheless, companies continue to explore in the country, exposing themselves to a great risk: While the concession can be explored under an Amparo being granted, none of these Amparo cases have reached a final resolution yet, so it's still unclear how courts will ultimately rule. This is something that I have been trying to warn the mining sector against. Starting May 2025, concession holders will be obliged to file proof of exploration works, therefore having to report if they completed exploration without an Amparo granted, essentially accusing themselves of illegal exploration. I urge mining companies to exercise caution.