Law Firm Ready to Handle Intricacies of Mining Regulation,

Q: How did Asesoría Legal y de Negocios get involved in the Mexican mining industry, and what have been the firm’s milestones within this sector?

A: We secured business from a Canadian junior company 11 years ago, which wanted to start an exploration venture in Mexico. That was our first customer in the mining industry. We assisted them in constituting a Mexican subsidiary company in order to start their business here, and continued supporting them with regulatory compliance and litigation. After that, we began to work with operating companies. One of our most rewarding experiences in the mining industry has been with Agnico Eagle’s mines, assisting them with their operations in Mexico. This has been one of our most iconic missions for the sector due to the complexity of the legal needs that major international companies require. Over 11 years, we have served the sector with a distinct intensity, giving us a broad knowledge base and skill set, as well as a bounty of success stories. Our firm has developed expertise, not only in regulatory matters, but also on the operating side. Mining requires specific advice that other industries do not, such as on matters concerning community relations, land access, and environmental requirements. Mining may well be the most complex and complete industry around in terms of its legal needs, but ALN is more than equipped to handle all its intricacies.

Q: How does ALN’s structure enable the firm to provide reliable assistance in all of the matters you attend?

A: We have been growing a group of professionals with different skills over the past decade, including people with experience working in the mining industry. Regulatory compliance to labor related issues, such as unions and official Mexican standards, and inspections in safety and health are covered by our legal experts. We have another expert that covers the environmental aspects of the mining industry, which is one of the most essential areas of regulatory compliance in Mexico. We have also established strategic alliances with law firms in Mexico City in order to expand the range of services we offer. Some of the capital’s most knowledgeable and experienced lawyers help with our cases, giving our customers a faster resolution. 

Q: Which are the most common legal services that ALN offers in relation to land tenure?

A: Our customers request our assistance during negotiations with land owners or ejidos. We help them out with the due diligence when reviewing the land titles. The lack of title certainty is something that mining companies really worry about. The land owners and communities could initially react positively, but if the due diligence in land property does not come out well, there are going to be problems. We have found land titles that had not been updated for 150 years, so you can imagine how complicated it can be to get those titles in good shape. A couple of years ago, we performed due diligence for a 4,000 hectare piece of land in the mountains of Chihuahua. To get there was a ten-hour drive from the capital. This huge parcel of land belonged to hacienda owners in the 19th century, and was broken down into little pieces without following the proper legal procedures for entitlement. The challenge was to garner the support of the neighboring communities and bring them to accept that this surface land was going to be used for mining purposes. In such situations, we can assist our clients in the land regularization process and audit procedures, providing the certainty that everything is in good legal standing. Law firms tend to forget that human values are the most important thing to apply to their negotiations. In order to become a good lawyer you first have to become a good person. If you want something to happen, you should meet people’s expectations of the company. During a land tenure negotiation, it is important to put yourself in the shoes of the other party, find out their bare necessities, and make sure that your customer understands their needs. You always need to ensure a win-win situation for the both parties, otherwise, potential problems could lead to the failure of a mining project.

Q: What differentiates a sustainable temporary occupation agreement from one which is not?

A: The contemplation of what will happen to the community once the mining company leaves is what makes a project sustainable. Companies should consider alternatives that provide communities with a way to strengthen their local economies. I have worked with companies that have settled strategies like this since the very beginning, helping communities to reforest their lands and to promote the production of local crafts, to name two examples. Some companies have been educating small business owners on how to improve their commerce; others have been contributing to the enhancement of the local agronomical industry supply chain. Clearly, many mining companies are investing resources in the long-term sustainability and prosperity of the communities, helping them to become less dependent on mining activities. A lot of people think that the mining industry only leaves a bad mark in the towns and areas where it operates. I sometimes wish people could hear and see what I have seen in this sense. It is truly remarkable what a mining company with a sustainable project can do for the communities.

Q: How would you describe the current mechanism for the issuing of mining concessions and how important is the legal assessment of the management of these titles?

A: It is very important to have someone to go over their standing since mining agencies require numerous obligations that need to be observed periodically. For example, based on the number of hectares a mining company holds, it has semiannual duties that need to be paid in January and July. If companies miss the payment, they risk their concession being cancelled. Another yearly obligation that mining companies have is to carry out some sort of activity on their concession. Over the past couple of years, mining authorities have been very strict when it comes to obligations compliance. They have been conducting inspections to confirm that companies are carrying out the works they claim to have been performing. The idea behind this modification to the regulatory framework was to motivate mining companies to have dynamic concessions and to stop people who were claiming land based on speculation only to sell it on to mining companies. This is something that companies need to take seriously since the viability of their operations can be endangered if they do not comply with these laws.

Q: How should Mexico’s legal framework change in order to better accommodate industry concerns?

A: I have always said that Mexico does not have a problem with its legislation, the problem is how that legislation is enforced. The country is in need of a stronger mechanism to apply the laws being passed. A company can do great work during the permitting processes and negotiations, but if something goes wrong, it can take years to fix it. Mexico does not have the proper mechanisms for enforcing the law. We have seen many companies struggling with the law, not because they failed to comply with it, but because of the social and political issues surrounding those cases. This is difficult for mining companies to understand, particularly those who have abided by all the laws and regulations.