The Canada-based silver-producing company First Majestic Silver became the first company to obtain a provisional injunction against the recently approved Mining Law Reform approved by Mexican Congress in late April and published in the Official Gazette (DOF) on May 9, 2023. The provisional suspension is the first of many expected legal disputes coming from other mining companies impacted by the reform.
On May 30, 2023, First Majestic filed legal action before Mexico City’s Fourth District Court in Administrative Matters, arguing that the Mining Law reform would affect some concessions the company applied for. The company argues that the third paragraph of the fifth transitory article, which establishes conditions for granting mining concessions, poses a great threat to its potential concessions.
On June 1, 2023, Judge Ulises Rivera granted the company a provisional injunction to invalid Art. 5, paragraph 3. "The suspension is requested to halt all effects and consequences derived from the third paragraph of the fifth transitory article of the challenged decree, which means that the mining concession requests made under the previous prevailing law are not automatically dismissed without further processing," states the resolution.
The judge noted that the company is not looking to suspend its correspondent obligations, but is protecting its concession request to be automatically discarded by federal authorities solely based on the law’s reform publication.
Judge Rivera set June 7, 2023, as the date to conduct the audience to determine if he grants First Majestic a definitive suspension. In the meantime, the federal government can still appeal before a collegiate court whether to confirm, modify or overturn Rivera’s ruling.
The Mining Law reform spread uncertainty in the mining sector. At the time of writing, legal experts said that at least 10 mining companies are presenting or preparing to file injunctions against the new law. According to legal experts, companies have until next week to present measures. Initially, the injunctions are against those provisions that are called self-enforcing, which by the mere entry into force of the law are already applicable and, therefore, represent a grievance. “If you do not present an injunction request regarding these self-applicable provisions, you as a company lose your right to contest the provisions," an anonymous legal expert told BNAmericas.
In an interview with MBN, Gabino Fraga, Director General, Grupo Gap, said that the reform is complex and controversial since it was made under murky conditions. “[The reform] may be unconstitutional due to the process in which it was voted on, as Congress did not comply with the protocols that the Constitution states for modifying laws and for having the legal quorum to do so,” explained Fraga.