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Mexico

Legislation

  • Mining Law 1992 (as amended)
  • Mining Law Regulations 2012 (as amended)
  • Environmental Protection Law 1988
  • Environmental Protection Regulations 2000

Regulatory Risk Rating

Minimal
Regulatory Risk

Regulatory Corruption Risk

Very Low
Regulatory Corruption Risk

Corruption Exposure Risk

Low
Corruption Exposure Risk
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Those who are looking to invest in Mexico will find little of concern under the legal framework itself, which is a model for development and a high-water mark in the world of mining regulation. As yet, the law has not been adjusted to align with the position of the Mexican president - who has repeatedly stated that no new concessions shall be approved during his term. This has resulted in a political, though notably not legal, moratorium on concession rights and noise around the nationalisation of Mexico’s relatively recently discovered lithium deposits may raise further red flags for potential investors. Given Mexico’s increasing geopolitical and security risks, the law is certainly a safe haven designed to effectively protect investment.

Contents

Legislation

  • Mining Law 1992 (as amended)
  • Mining Law Regulations 2012 (as amended)
  • Environmental Protection Law 1988
  • Environmental Protection Regulations 2000

Regulatory Risk Rating

Minimal
Regulatory Risk

Regulatory Corruption Risk

Very Low
Regulatory Corruption Risk

Corruption Exposure Risk

Low
Corruption Exposure Risk
Regulatory Risk Rating Factors Risk Level
First Come / First Serve Subscribe
Application Criteria Subscribe
Duration Subscribe
Right to Renew Subscribe
Competing Licences Subscribe
Mineral Coverage Subscribe
Right to Mine Subscribe
Criteria for Mining Rights Subscribe
Tenure Subscribe
Surface Rights Subscribe
Government Take Subscribe
Transfer Rights Subscribe
Change of Control Subscribe
EIA Process Subscribe
Power to Revoke Subscribe
Age of Legislation Subscribe
Other Factors Subscribe

Overview

Mexico is one of the leading mining jurisdictions in the Americas and the mineral industry has traditionally been an important contributor to the Mexican economy. It is the world’s largest silver producer, responsible for just under 20% of global silver production and amongst the top 10 global gold producers. According to USGS, the country is also a major producer of copper, lead, zinc, bismuth, fluorspar, celestite, sodium sulphate, wollastonite, cadmium, diatomite, molybdenum, barite, graphite and gypsum. Following a discovery in Sonora state in 2014, Mexico is also now believed to have some of the largest lithium deposits in the world. Commercial production at the mine site where the discovery was made is targeted for 2023.

Mexico has long been recognised as an attractive investment environment for mining – with significant numbers of Canadian, US, Spanish and Japanese investors active in the sector. That being said, the industry is still somewhat understated as against its potential due to the ‘hangover’ of previous laws which restricted foreign ownership in the sector. Efforts since the 1980s to open the industry to increased foreign capital have proved successful and the existing legal framework has been a useful tool in attracting FDI. However, political risk has increased since the election of President ‘AMLO’ in 2018. The President has stated on numerous occasions that he does not plan to grant any new mining concessions and, as a result, a moratorium is now effectively in place – though laws have not been passed to support the President’s position. There has also been much discussion around the nationalisation of the country’s lithium deposits. In addition, State authorities have been known to use environmental requirements to stall or block projects in recent years, on occasion operating outside of the terms of the legal framework. Security concerns and difficulties with community engagement are also major considerations for those evaluating the jurisdiction. All that being said, the legal framework has not changed significantly since 2014 – so there has been little impact on legal risk in Mexico since the President was appointed. Should the President pass laws to support his public statements, there could be a significant change in Mexico’s risk profile.

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