Senators Oppose Reform to the Mining LawBy Karin Dilge | Mon, 05/30/2022 - 17:44
At least 43 senators of opposition parties PRI, PAN, PRD, Movimiento Ciudadano and recently formed opposition group Grupo Plural filed an unconstitutionality action against the reforms made to the Mining law, which declared lithium to be a state-owned resource.
The opposition legislators are requesting the Supreme Court of Justice of the Nation (SCJN) to annul the decree published by president López Obrador in the Official Gazette of the Federation (DOF) on April 20, 2022.
Chief Justice of the Supreme Court, Arturo Zaldívar, instructed to turn the file to one of the court’s ministers, who in the next days will have to decide whether to admit the procedure of the unconstitutionality action or reject it.
The reforms to the Mining Law were approved quickly in both chambers of Mexico’s Congress, even though opposition members argued that expert opinions were disregarded and that the issue was not sufficiently debated.
The Mining Law’s reform is expected to cause Mexico to lose around US$24.2 billion in investment. The National Confederation of Industrial Chambers (CONCAMIN) highlighted that if the reform is changed for one that allows private participation, 350,000 jobs would be added to the more than 3 million that the mining industry already offers, benefiting more Mexican families.
“The reform creates great uncertainty, particularly the section that reserves any strategic mineral for the exclusive use of the state… key minerals are already nationalized via the Constitutional Article 27. This creates uncertainty among mining companies operating in the country and, of course, for new projects that could be developed,” said Karen Flores, Director General, Mexican Chamber of Mining (CAMIMEX).
CAMIMEX estimates that the country will receive over US$3 billion in 2022, an amount significantly lower than the US$4.2 billion received in 2021. According to the chamber, the sector never did recover from the Tax Reform of 2014. The recently approved Mining Law Reform has created further uncertainty. CAMIMEX said that over 2,000 projects have been suspended since 2014. In addition, the absence of new concessions worries players in the sector.
On April 14, the initiative to modify articles 1, 5, 9 and 10 of the Mining Law was approved. The new reform seeks to “guarantee the self-determination of the nation, as well as the energy sovereignty of the people over lithium and other minerals that are strategic and necessary for the energy transition. In addition, to create a decentralized public body that oversees the exploration, production and use of the mineral.” Because the white gold is now publicly owned, the Mexican state will not grant concessions, licenses, contracts, permits or authorizations for its exploitation to private companies.