MINING IN MEXICO — Long tradition to Mexican mining law

As the country in the Western Hemisphere with the longest mining history, Mexico has developed an important body of mining law.

The law is derived partly from the legal concepts and traditions that evolved in Spain and elsewhere in Europe regarding ownership and production of minerals and, in part, from practical experience gained in the New World. Mexico’s new Mining Law, which became effective in September, 1992, replaces the complex Mining Law of 1975. Regulations associated with the new law were issued in March, 1993.

The 1992 law was developed within the framework of Mexico’s National Development Plan, covering the years 1989 through to 1994, and its National Program for the Modernization of Mining for the years 1990 through to 1994. Objectives of the new law are to:

* channel investment to the mining sector, especially in exploration * simplify bureaucratic procedures

* reduce the influence and number of government agencies

* provide the legal authority to interpret and apply the new law * develop small-scale mining

* provide for safer working conditions and protection of the environment. The concept that minerals, including petroleum, are a part of national patrimony was embodied in Article 27 of the Constitution of 1917, the basis of Mexico’s present legal system.

The Mining Law of 1930 was considered relatively liberal and provided for 100% of foreign investment.

The 1961 Mining Law produced “Mexicanization” of the mining industry by requiring majority Mexican participation in both equity and management of mining companies.

The 1975 Mining Law gave the government even more control, adding procedures, requirements and legal uncertainties. The 1990 regulations were designed to ease provisions of the 1975 law; they permitted foreign investment of up to 100% by means of trusts with certain restrictions.

Finally, the new Mining Law of 1992 simplifies procedures and encourages investment by national and foreign interests. Restrictions are liberalized on the development of coal, iron ore, phosphate rock, potassium and sulphur by the private sector.

— From a recent issue of “Minerals Today” of the U.S. Department of the Interior, Bureau of Mines.