Environmental, Social Compliance Key to Face Legal Challenges

Q: How did ALN Abogados adapt its services to the restrictive measures of the past government, and what are the primary legal issues you currently manage for your clients?

A: I would not characterize the previous administration’s approach as anti-mining. The challenges stemmed more from a lack of understanding among authorities than an intentional agenda against the industry. Our firm adapted by providing clients with tailored legal strategies to navigate these challenges. For instance, we addressed significant initiatives like the lithium reform in 2022 and the mining reforms in 2023, which prompted numerous legal actions, including injunctions and litigation. These efforts were crucial in helping companies protect their rights and support their projects in an evolving regulatory landscape.

Q: How have the firm’s amparos filed against the Mining Law progressed, and what do their outcomes mean for the industry?

A: The injunctions presented a unique challenge, as each case required a customized strategy tailored to the company's specific circumstances, whether they were in full production, advanced exploration, or an early development stage. For instance, a company operating multiple mines required a distinct legal approach compared to one managing a single advanced exploration project. Our approach was thorough; in some cases, we filed up to 13 separate injunctions to address the diverse implications of the reforms. Of the 78 cases we managed, only six or seven did not progress as anticipated, largely due to variations in judicial interpretation. In certain regions, courts issued contradictory rulings on nearly identical cases, creating complications, especially when explaining these inconsistencies to international clients.

Currently, the Supreme Court has assumed jurisdiction over the unresolved cases. While we initially anticipated a resolution by year’s end, recent delays have made the timeline uncertain. The Court's decisions will significantly shape the industry's future, offering clarity on regulatory challenges and setting precedents for how companies can safeguard their rights moving forward.

Q: How are you advising clients with projects involving open-pit mining, given the potential ban?

A: The proposed reform indicates that open-pit mining may only be allowed for projects deemed “strategic” to the state, though the criteria for what qualifies as strategic remain undefined. Considering this uncertainty, we advise clients to ensure their projects are fully compliant with permits, environmental regulations, and community engagement standards, as these factors will likely strengthen their position during evaluations.

To support this, we conduct comprehensive internal audits and work closely with clients’ environmental and regulatory teams to identify and address potential risks. Furthermore, we advise clients to articulate the strategic importance of their projects, emphasizing their contributions to the industry and the national economy. 

Q: How do you anticipate environmental permitting policies evolving under Claudia Sheinbaum’s government, and how can the mining sector and government achieve a balance?

A: Under the new administration, we have observed a shift toward greater openness and dialogue. While projects with deficiencies will face rejection, the government is now more willing to engage constructively with companies and evaluate proposals based on their merits.

Clear alignment between companies and authorities is essential, as miscommunication during the previous administration led to avoidable challenges. Early engagement with authorities to identify and resolve potential concerns not only minimizes the risk of litigation but also streamlines the permitting process, paving the way for more efficient and constructive outcomes.

Q: To what extent does the judicial reform affect the mining sector?

A: While the judicial reform does not eliminate national legal provisions, it introduces significant concerns. A key issue is the overhaul of how judges and magistrates are selected. Previously, the process was highly regarded, with judges dedicating decades to their careers, ensuring stability and continuity. Unfortunately, the proposed reforms weaken this structure, replacing it with a system that may lack the same rigor and respect for the judiciary.

This shift creates substantial uncertainty not only for the mining sector but for all industries in Mexico. Furthermore, it undermines Mexico's credibility in international trade, particularly with key partners under USMCA. The lack of judicial consistency also complicates the ability to assure international clients that the legal system will provide fair and predictable outcomes.

Q: What scenarios does ALN Abogados anticipate regarding the increased taxes on the mining sector, and what strategies are being considered?

A: Any tax increase, regardless of its scale, has a substantial impact on company operations. It requires businesses to adjust their budgets and conduct financial analyses to accommodate the additional costs. However, our clients have not yet considered pursuing legal action in response to these tax increases.

Most of our clients remain committed to investing in Mexico and are focused on identifying opportunities for expansion. The primary concern is how these fiscal measures restrict companies’ ability to allocate resources to social and community development initiatives, which are vital for long-term sustainability. To remain competitive and attract foreign investment, Mexico needs to foster a stable and favorable business environment. Unfortunately, decisions like these undermine that objective.

Q: How is ALN Abogados approaching Claudia Sheinbaum’s new administration and staying informed about new policies?

A: As ALN Abogados, we do not engage directly with the government. Instead, we collaborate through organizations such as CANCHAM, where I lead the Chihuahua chapter, and CAMIMEX. These platforms allow us to participate in important discussions and dialogues with the Mining Commission. Additionally, our involvement in global mining organizations, such as the Association for Mineral Exploration in British Columbia, PDAC, and the Foundation for Natural Resources and Energy Law, keeps us connected to key industry forums. This ensures that we can maintain a strategic outlook on global mining trends and stay up to date with relevant developments in the sector.

Q: What were some of the key highlights for ALN Abogados this year and what does the firm plan for next year?

A: This year has been exceptionally active for us. We participated in several key international and local events, beginning with the Roundup Conference in British Columbia in January. Additionally, we were invited to speak at prominent forums such as Mexico Mining Day and attended mining conferences in Chihuahua, Durango, and Hermosillo. In October, we expanded by opening an office in Mexico City and are now finalizing plans to establish a Vancouver office. These strategic expansions underscore our commitment to serving the mining sector effectively and staying at the forefront of industry advancements.

Looking ahead to 2025, we aim to sustain this momentum by further strengthening our network and increasing our involvement in conversations that will shape the future of mining both in Mexico and globally.