Redefining Strategic Due Diligence in Evolving Mining Frameworks

Mexico's mining industry is navigating a complex legal landscape, forcing companies to develop new strategies for investment and risk management, experts say. While the 2023 Mining Law is now in effect, the lack of detailed secondary regulations creates an "atypical" environment of uncertainty.

Experts acknowledge that the central challenge in the legal field is the ongoing uncertainty created by the 2023 Mining Law reform, which is now in effect but still lacks the detailed secondary regulations needed to clarify its application. "We have a new mining law, but it is a law that does not have an application that is equal for everyone," said Armando Ortega, President of the Mexico-Canada Bilateral Committee, Mexican Business Council for Foreign Trade, Investment and Technology (COMCE). Ortega noted that legal advisors are now recommending "practicality and resilience," urging companies to address the new legal landscape on a case-by-case basis.

This uncertainty has profoundly impacted how new investments and acquisitions are evaluated. Gustavo Alarcón, General Counsel, Fresnillo, explained that due diligence has become far more complex. "Our due diligence exercises have to be more robust; we have to look beyond the document," he stated, noting that an environmental permit no longer guarantees a project's viability without a deep analysis of future social and regulatory risks. Santiago Suárez, Partner, Servicios Legales Mineros (SLM), added that this now requires interdisciplinary teams, as legal analysis alone is no longer sufficient.

Suárez highlighted the importance of considering the new law's provisions for mine closure and financial guarantees, expressed in the law as “Financial Vehicle.” While the industry supports the goal of ensuring environmental protection, experts highlighted practical challenges. Ortega pointed to the need for more modern and flexible financial instruments than traditional surety bonds, citing letters of credit as a more practical alternative. "The country has to leave the obsession of regulating everything and focus more on standards and voluntary cooperation," Ortega argued.

Looking ahead, experts expressed cautious optimism. Alarcón noted that while the uncertainty of recent years has been challenging, the Supreme Court's recent rulings have begun to provide some clarity. Still, he emphasized that the entire industry is waiting for new secondary regulations, which, regardless of their defects, will give more certainty. Armando Ortega suggested that a potential renegotiation of USMCA could be a positive catalyst, as it would likely make North American countries to converge on a more stable legal framework for mining, a sector critical for the regional supply of energy transition minerals.

Following the Supreme Court’s June 25, 2025 ruling, Mexico’s New Mining Legal Framework is now fully constitutional and uniformly enforceable. While companies face uncertainties as they navigate the transition to the updated framework, the government emphasizes that the upcoming regulations are designed to address the concerns of mining companies, investors, and other stakeholders.

Latest Reform, Impact

On May 8, 2023, Mexico enacted sweeping reforms to the Mining Law, the National Waters Law, the General Law of Ecological Balance and Environmental Protection, and the General Law for the Prevention and Comprehensive Management of Waste. Collectively known as the New Mining Legal Framework, these changes marked the most significant transformation in the sector in over decades.

The reforms redefined concession-granting processes, shortened concession durations, linked approvals to water availability, and made prior consultation with Indigenous and Afro-Mexican communities mandatory. They also introduced stricter rules for transferring concessions, established financial obligations for environmental compensation, and created new causes for cancellation with potential criminal penalties.

Following the reforms, several companies and individuals challenged the legislation through amparos, claiming it violated acquired rights and had been enacted through flawed legislative procedures. The case ultimately reached the Supreme Court, which on June 25, 2025, issued a ruling in Amparo en Revisión 391/2024. The Court confirmed the reforms are constitutional and enforceable, revoking a lower court decision and ending the dual system in which some concession holders operated under suspensions while others followed the new rules. The ruling establishes that the New Mining Legal Framework now applies uniformly to all concession holders in Mexico.

The Court clarified that mining concessions are “administrative acts of mixed nature,” combining essential clauses that constitute acquired rights with regulatory clauses that remain subject to change. Acquired rights include the term of the concession, the authorized type of activity (exploration, exploitation, or both), and the specific mining lot and minerals permitted, elements that cannot be modified without due process. Regulatory clauses cover obligations such as water use, environmental responsibilities, approval of transfers, and conditions for extending concessions. These rules can evolve without infringing on acquired rights, reflecting the state’s authority to regulate resources and protect public interests.

For concession holders, this distinction has practical implications. Exploration and exploitation rights remain intact, but holders should review their titles to confirm the specific type of concession. Water usage now requires a separate industrial-use concession, as preferential rights have been eliminated. Transfers must be registered and approved by authorities rather than relying on private agreements. Financial guarantees for environmental restoration are mandatory, and mining in protected areas is prohibited. Rights related to expropriation or temporary land occupation are no longer automatic and require administrative approval. The Court emphasized that these measures serve broader public interests, including environmental protection and sustainable development.

The SCJN also affirmed that the reforms do not violate the principle of non-retroactivity, as they affect only regulatory conditions and not the essential elements of concessions.

“This resolution has produced the reality that we need to accept and work together accordingly. The New Mining Legal Framework passed in May 2023 is now the only effective and constitutional legal framework for our mining concessions,” said Ruben Cano, Founding Partner, CR Legal. “Keeping concessions valid is paramount, including complying with all obligations in Art. 27 and avoiding any cancellation causes outlined in Art. 42 of the new Mining Law.”

Ongoing Policy Updates and Government Initiatives

In March 2025, Fernando Aboitiz, Head of the Extractive Activities Coordination Unit at the Ministry of Economy, highlighted at Mexico Mining Forum PDAC that an upcoming regulatory framework aims to address concerns raised by mining companies, investors, and communities. “It seeks to streamline administrative procedures, enhance transparency, and improve engagement between the industry and local communities. By reducing bureaucratic bottlenecks and providing clearer guidelines, the government hopes to attract renewed investment while upholding high environmental and social standards,” said Aboitiz.

A key element of the new mining policy is social certification. Aboitiz emphasized the importance of transparency and accountability, noting that past administrative halts were largely due to the lack of structured mechanisms for community engagement and environmental responsibility. This aligns with global trends in responsible mining, where companies must demonstrate sustainability commitments.

The strategy also aims to revitalize exploration efforts to ensure the sector’s long-term viability through the discovery and development of new mineral deposits. All new exploration must be coordinated with the Mexican Geological Survey to meet national standards and support efficient resource development.

To support this agenda, the government is developing a public-private partnership (PPP) model that will redefine mining project structures. Under this approach, the private sector will lead initiatives while the government provides regulatory oversight, balancing economic development with responsible governance and fostering stronger collaboration between companies and authorities.