Summary of Environmental Law in Mexico

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• 18. Mining
• 18.2. Exploration and Development of Mines
• 18.3. Regulation of Mining Wastes
• 18.4. Reclamation of Mines
• 18.5. Mining Rights on Public Lands

Mexican Constitution

Article 27 of the Political Constitution of the United States of Mexico (hereinafter Mexican Constitution) grants the Nation original ownership of the nation's lands and waters and direct dominion over all natural resources located in the continental shelf and the submarine foundations of islands; all minerals and substances in veins, mantels, masses or deposits which are by nature distinct from the components of the ground; metallic minerals used in industry; precious stones; salts; and materials that may be used as fertilizers. Under the Mexican Constitution, the Nation has an obligation to promote the conservation of natural resources and the restoration of the ecological balance. Private parties may only participate in the exploitation and use of these natural resources through concessions granted by the Federal Executive.

Laws

The Mexican Constitution grants the Congress of the Union (Congreso de la Unión) the power to legislate in the area of mining. Mining activities are regulated under the Mining Law (Ley Minera) and the Regulation under the Mining Law (Reglamento a la Ley Minera), while wastes resulting from mining activities are governed by the Regulation under the General Law of Ecological Balance and Environmental Protection Regarding Hazardous Waste (Reglamento de la Ley General del Equilibrio Ecológico y Protección al Ambiente en Materia de Residuos Peligrosos) (hereinafter Hazardous Waste Regulation). Wastewater discharges resulting from mining activities are governed by the National Waters Law (Ley de Aguas Nacionales) and the Regulation under the National Waters Law (Reglamento de la Ley de Aguas Nacionales). The Foreign Investment Law (Ley de Inversión Extranjera) refers to foreign investor participation in mining concessions.

18.2 Exploration and Development of Mines

Mining Activities

The Mining Law regulates the exploration, exploitation and benefaction of national resource deposits, which include: minerals and substances for industrial use; rare metals; mineral gems; rock salt and its by-products; products derived from the decomposition of rocks whose exploitation is mainly carried out through underground works; certain minerals and organic materials which may be used as fertilizers; certain solid fuels; and other resources identified by the federal executive. Specifically excluded from the jurisdiction of the Mining Law are: oil and solid, liquid or gas hydrocarbons; radioactive minerals; substances in suspension or dissolved in ground waters; rocks or products resulting from their decomposition used as building materials or in construction; products derived from the decomposition of rocks whose exploitation is mainly carried out by means of open-pit works; and salt from salt mines formed in endorheic basins.

Concessions and Assignments

Under Article 10 of the Mining Law, all mining activities are carried out under concessions and assignments granted by SE. There are two types of mining concessions, exploration ones and exploitation ones. Mining assignments are issued only to the Mineral Resource Council and strictly for the purpose of identifying and quantifying the potential mineral resources in a given area. A concession or assignment does not grant property rights over the surface but rather the right to explore and exploit minerals and substances that are different from the components of the soil.

Holders of concessions and assignments are subject to expropriation, temporary occupation or easements. The exploration and exploitation of minerals is limited to Mexican nationals, ejidos and agrarian communities, and companies created under Mexican law.

Exploration Concessions

Mining exploration concessions are generally granted by SE to whomever submits the application first. For certain areas, such as Mexican marine zones or areas not included in mineral reserve zones, SE may also evaluate which of the parties offers the best technical and economic conditions for the undertaking of exploration. Exploration concessions are granted for a non-renewable six year term as of the date they are issued.

Exploitation Concessions

Mining exploitation concessions may be granted in substitution of a currently valid exploration concession. They are granted for fifty years from the date they are issued and may be renewed.

Mining Assignments

Mining assignments are granted on non-committed lots over free ground and may only be issued by SE to the Mineral Resource Council. Mining assignments confer rights and obligations and have a non-renewable duration of six years as of the date they are issued.

Radioactive Substances and Minerals

Unlike other natural substances and minerals, rights to explore, exploit and use radioactive minerals cannot be granted through concessions or by contract. These activities are reserved exclusively to the State and regulated under the Law Regulating Article 27 of the Constitution in Regard to Nuclear Matters (Ley que Regula el Artículo 27 de la Constitución en Materia Nuclear). Under this Law, the exploration, exploitation and use of radioactive minerals, including the construction and operation of nuclear plants, is exclusively carried out by the Mineral Resource Council through assignments from SENER.

SENER may determine the program and technical conditions to be fulfilled by the Council in accordance with the relevant National Development Plans (Planes Nacionales de Desarrollo).

Hydrocarbons and Petroleum

Activities related to the exploration, exploitation and use of all solid, liquid and gaseous hydrocarbons, including petroleum, are reserved exclusively to the State. These activities are exclusively carried out by a decentralized state-controlled entity named PEMEX through petroleum assignments granted by SENER.

National Mineral Reserve Zones

Article 10 of the Mining Law grants the Federal Executive authority to set aside zones of mineral reserves in regard to which no concessions or assignments may be granted for public interest reasons and for the purpose of satisfying future needs of the country. However, before the land may be included in a mineral reserve zone, however, it must first be explored by the Mineral Resource Council.

Proof of Compliance with Ecological Protection and Industrial Safety Standards

Concession holders must comply both with the general legal provisions and the Official Mexican Standards (Normas Oficiales Mexicanas (NOMs)) pertaining to safety and the protection of the ecological balance. Concession holders may be required under Articles 28 through 31 of the Mining Law to prove their compliance with relevant environmental or workplace safety laws, regulations and standards by submitting receipts showing the purchase of equipment used for workplace safety and the prevention of pollution or the undertaking of environmental remediation projects. The Mining Regulation states that workplace safety and environmental protection standards applicable to the mineral-metallurgical industry shall determine which reports must be filed with SE and the filing frequency

Sanctions

Violations under the Mining Law or the Mining Regulation may trigger sanctions, which include the cancellation of mining concessions and assignments, as well as fines. Cancellation may arise as a result of concession or assignment holders failing to fulfill the obligations imposed, including those relating to environmental compliance. Cancellation may also be triggered by the disposal of radioactive minerals discovered while carrying out concession or assignment undertakings. Fines ranging from ten to two thousand times the minimum daily wage in the Federal District (Distrito Federal) may be imposed in connection with the following violations, among others:

1. Extracting minerals without having a mining concession;
2. Preventing the undertaking of works by a person having authorization to do so;
3. Permanently removing or destroying fortification works, struts and other works required for the stability and safety of mines;
4. Hinder official inspection visits or failing to be in attendance during an inspection;
5. Failing to appoint an engineer responsible for worker safety or assign that person other duties which prevent him from carrying out safety functions;
6. Failing to take the necessary measures to prevent accidents or protect the life or physical integrity of the workers or members of the community; and
7. Failing to timely and truthfully furnish statistical and technical data, as well as accounting records, in accordance with the conditions set forth in Mining Law Regulation.

Where the concessionaire or assignee endangers the life or physical integrity of workers or other members of the community, the annulment, suspension or extinction of rights granted by concession or assignment may be requested by the Joint Commission on Safety and Hygiene (Comisión Conjunta de Seguridad e Higiene); any interested party or the private property owners or holders may also make such request where damages are caused or likely to be caused to public or private property.

18.3 Regulation of Mining Wastes

Mining Law

Article 39 of the Mining Law states that "in carrying on exploration, exploitation and mineral or substance benefaction activities, mining concessionaires must see to the car of the environment and protecting the ecology in accordance with the respective legislation and rules." Thus, under the Mining Law, all the environmental protection requirements set forth in other environmental laws and standards, such as: environmental impact assessments, water uses and discharges, air emissions, hazardous wastes and noise emissions expressly apply to mining activities.

Ecology Law

The Ecology Law charges the Secretariat of the Environment and Natural Resources (Secretaría del Medio Ambiente y Recursos Naturales (SEMARNAT)) with the regulation of activities relating to the exploration and exploitation of natural resources. Expressly included in SEMARNAT's responsibilities is the evaluation of environmental impact statements (EISs). Article 108 of the Ecology Law also authorizes SEMARNAT to establish measures for the prevention and control of the harmful effects arising from mining exploration and exploitation of non-renewable natural resources. In addition, Article 108 states that SEMARNAT will issue NOMs dealing with the protection of waters used in or resulting from such activities, the protection of the soil, the flora and the fauna, as well as the proper way and the adequate location for disposing of mining wastes.

To date, no NOMs specifically directed at the mining industry have been issued, although we may consider NOM-121-STPS-1996, on safety and hygiene for mining work, and NOM-120-ECOL-1997, specifying environmental specifications for direct mining exploration activities in dry and temperate climate zones where xerophilous scrub, tropical deciduous forests, conifer forests or live oak is grown.

Hazardous Waste Regulation

Under the Hazardous Waste Regulation (Reglamento de Residuos Peligrosos) mining wastes -- materials left over after the removal of valuable minerals and substances (called jales in Mexico) - are defined as hazardous wastes. The Hazardous Waste Regulation allows wastes to be stored and disposed of in special "jale deposits", referred to in Mexico as "presas de jale". These deposits may be located where the wastes originated or were generated, provided they are located farther than 25 kilometers away from a potentially affected urban center. Currently, there are no NOMs relating to jale storage or the selection or construction of presas de jales.

National Waters Law

Mining Regulations under National Waters Laws. The use of national waters in mining activities requires a concession or assignment from the National Water Commission (Comisión de Aguas Nacionales (CNA)). Although such a title is not generally required for the use of groundwater, if the area has been designated as a prohibited or regulated zone a concession or assignment will be required. Pursuant to Article 124 of the Regulation under the National Waters Law (Reglamento de Ley de Aguas Nacionales), a water concession or assignment is also required for the use of any surface waters located within the mining concession itself. Wastewater resulting from mining activities requires a wastewater discharge permit and must comply with any applicable NOMs. Mining wastewater is defined as groundwater which must be extracted in order for mining exploration and exploitation activities to be carried out.

18.4 Reclamation of Mines

Two important principles regarding the reclamation of mines are embodied in Article 27 of the Mexican Constitution. First, the Nation retains ownership of the land at all times; concession holders only have rights to mined materials. Since the property reverts back to the Nation upon the termination of the concession, the Nation may establish the conditions in which the property must be handed back. The second important principle has to do with the Nation's obligation to take those measures, which are necessary to protect the natural resources of the country and restore the ecological balance.

Neither the Mining Law nor the Mining Regulation explicitly foresee the restoration of the environment back to its natural or stable state upon a mine being closed. Article 98 of the Ecology Law, however, requires that steps be taken to provide for land remediation in connection with private or public works that cause severe land degradation. Concessions granted by the SE to mining companies may spell out requirements pertaining to the closing of mines.

18.5 Mining Rights on Public Lands

Mining Rights on Public Lands Under Article 27 of the Mexican Constitution, all lands in which minerals and substances are mined are deemed to be "public lands" belonging to the Mexican Nation. The Nation grants private parties the right to undertake mining activities through the granting of concessions and assignments. These rights, however, do not grant ownership rights to the land. While Mexico has designated certain areas as national ecological and wildlife reserve zones, these areas are still considered free ground with regard to mining activities. Mining activities in these zones must, nevertheless, be in the public interest. Those areas in which mining activities are not permitted are designated as mineral reserve zones.