Mining Law Reform Neglects Mine Closure Process

The Mining Law reform, which entered into effect in May 2023, has caused uncertainty within the mining sector. One major concern is that the reform introduces significant changes without specifying the procedures for implementing the new law and lacks clarity regarding the process for closing mines.

Marisol Barragán, Director General and Country Manager, New Gold, suggests that the Mining Law could be enhanced by incorporating provisions related to social and environmental concerns, as well as procedures for the mine closure process. She points out that the recently approved reform lacks clarity in addressing this crucial aspect of mining projects.

Barragán further highlights that the law should include a "Social Closure Plan" to provide a clear framework for companies to develop and implement closure plans. According to the Mining Law, published in the DOF, the Ministry of Economy (SE) should approve mine closing plans with the opinion of SEMARNAT. “The closure plan aims to establish the obligations, procedures and actions that concessionaires and assignees must carry out for environmental repair, restoration, rehabilitation or remediation, as well as for social mitigation or compensation, once mining operations conclude," reads the law’s Article 61. 

The only section in which the law specifies a closing procedure is in Article 107 BIS, which says that concession holders must create a plan called the “Mining Restoration, Closure and Post-Closure Program.” The program should outline how concession holders will repair environmental damage caused by mining activities, from exploration to closure, following legal guidelines. Furthermore, companies must submit the program before SE, which must review it within 180 days. Once the plan is approved, the mining company must provide financial assurance, like insurance or a deposit, to ensure it follows through on its commitments. However, the law did not specify steps to deliver a proper restoration and closure plan, nor the aspect in which it will be evaluated.

According to the transitory provisions of the new law, the government must formulate the corresponding set of rules within the next 180 days after the publication of the decree in the DOF. For this purpose, the federal government conducted technical consultations with key stakeholders, including mining associations. Experts expect the yet-to-be-published rules to clarify the processes to avoid creating more uncertainty.