Mexico’s Mining Law: AMLO’s reform

Mexico’s Mining Law of 1992, currently in force, has as its central objective to favor the interests of private individuals, under the assumption that the massive entry of national and international capital in the exploitation of the country’s mining resources was required to promote, as an invisible hand, the development of the sector and the generation of sources of employment.

The above paragraph is part of the text of an initiative to reform a set of laws, including the Mining Law, submitted by the government of President Andrés Manuel López Obrador to the Legislative Branch.

The proposed changes call for mining concessions to be granted through public bidding and reduce the concession period from 50 to 15 years, extendable once for another 15 years.

According to the federal government, the current law allows a predatory exploitation of the country’s mineral resources, in the sense that a mining concession is granted for the totality of the resources found in the concessioned lot, so that the holder of a concession has rights over all the minerals or substances found, without the State or the community obtaining any benefit for such resources.

In the initiative presented, it is proposed that the concession only be granted per mineral or substance susceptible of exploitation, which will allow greater control and generation of resources for the State and the affected communities.

Mining Law

Another suggested change consists of transforming the figure of the assignment so that the head of the Ministry of Economy may grant assignments to companies of the public parastatal sector to carry out exploration and exploitation activities of minerals or substances.

The assignment will have an indefinite term; the assignee entity will have the same obligations as the concessionaire, but will not be able to transfer its rights and obligations to private third parties.

In addition, the initiative proposes to eliminate the three «afirmativas fictas» contained in the Mining Law, to leave as the only mechanism for granting a concession the corresponding contest, and the granting of the extension is conditioned to the compliance of the concessionaire with its corresponding social and tax obligations.

In addition, a chapter on crimes is included in order to punish criminal conduct in mining matters. The following will be considered crimes: the illegal extraction of minerals or substances; the sale or trafficking of minerals and metallurgical derivatives not under concession; the impairment of the physical safety of workers due to failure to comply with the provisions of the Mining Law and its Regulations, as well as the illegal transfer of mining and metallurgical products out of the national territory.